Waiting for the budget announcement to buy a new car? Uncertainty is growing, but the answer depends largely on the type of vehicle you want.
The new budget could make imported cars cheaper and hybrids/EVs,petrol-burners expensive, or the other way around. Expect everything. To skip all the brain slush, we asked AI to read all relevant auto sector reports published by ProPakistani so far and make a prediction.
AI thinks both impulsive and regular buyers of Completely Built Units (CBUs) may benefit from delaying their purchase.
Several sources now on-station in Islamabad have told ProPakistani that the federal government is considering major tariff reductions which will lower import duties on CBUs and increase competition.
One source said: Customs duty could be reduced to 50 percent.
Another said: Regulatory duty could fall to 20 percent.
The best one: Total import-related tariffs could decline from 150 percent to 70 percent. But can you believe anyone?
The car market is like a toothless rabbit chewing on spoiled carrots. There’s always something bad likely to happen. AI just predicted the best and worst-case scenarios for everyone.
If relief is approved, imported vehicles post-budget could become cheaper. Maybe prices of existing used imported vehicles will also decline by 10-15 percent from July as cheaper imports arrive.
AI said for buyers interested in imported cars, waiting another month could lead to avoiding a burnout.
Current tax incentives make hybrids and EVs very affordable. Pure electric vehicles currently benefit from a 1 percent GST rate, while locally assembled hybrids are subject to an 8.5 percent GST.
Without any warning, GST rates for hybrids and EVs may be revised upwards.
AI cautioned that buyers considering hybrids or electric vehicles may find current prices more attractive.
Buyers aren’t the only ones on the hot seat. Several manufacturers have launched aggressive promotions ahead of the budget.
Hyundai wants locals to book available models before any potential tax changes. MG Pakistan has introduced incentives on the MG HS PHEV, including interest-free financing and additional customer benefits worth Rs. 550,000.
These promotions are widely seen as efforts to secure sales before the start of the new fiscal year. AI said don’t be impulsive.
AI told us the car’s invoice date matters more than the booking receipt. If a vehicle is invoiced after June 30, any new taxes introduced in the budget can still be passed on to the customer.
For higher-end hybrids and SUVs, a GST increase could add lacs to the final price.
AI again cautioned that buyers should confirm when the vehicle will be invoiced before worrying about booking first.
For locally assembled petrol cars, the impact of the budget will remain limited. AI assured us the worst has already happened.
The government is considering incentives for local auto parts manufacturers, which could help lower production costs.
Just tax measures targeting non-filers and documentation requirements may become stricter. Manufacturers are not expected to make major immediate price adjustments in this segment.
All feelings, prices and superstitions aside, the new budget is expected to affect all car segments in their own unique way.
In the end, AI failed to decide. Imported vehicles could become cheaper.
On the other hand, hybrid and electric vehicle buyers may benefit from securing current prices if the government starts dropping price bombs.
Prospectus buyers of petrol/diesel cars: just Netflix and chill; apart from fuel prices, car rates in this segment likely will not be impacted.