Car prices have risen drastically over the past year due to a steep decline in the local currency value and a rise in tax rates, interest rates, freight charges, and material costs.
The recent price hikes have driven the prices of Suzuki Alto and its competitors close to or over Rs. 2 million. Here’s how much the prices of Suzuki Alto and its competitors have increased:
|Pak Suzuki Motor Company|
|Models||Prices in August 2021 (Rs.)||Prices in August 2022 (Rs.)||Increase (Rs.)|
|Suzuki Alto VX||1,134,000||1,789,000||655,000|
|Suzuki Alto VXR||1,335,000||2,079,000||744,000|
|Suzuki Alto VXL AGS||1,521,000||2,399,000||878,000|
During the same time last year, the enactment of Automotive Industry Development and Export Police (AIDEP) 2021-26 allowed for a reduction in car prices. However, the soaring demand for cars led to tremendous CKD imports, which drove up the current account deficit.
To stop foreign exchange reserves from declining further, the government increased Federal Excise Duties (FEDs), Additional Customs Duties (ACDs), and General Sales Tax (GST) on certain vehicles.
Early 2022 saw the ousting of former prime minister Imran Khan, following which, Pakistan’s economy also suffered due to political instability. Furthermore, in the 2022 fiscal budget, the government increased taxes on cars further, along with putting curbs on the auto sector imports.
Industry experts, as well as the automakers, reckon that the company is likely to hurt the car demand by 25 to 35 percent.