KARACHI, Aug 11: The sale of locally-produced cars fell by 55 per cent to 4,744 units in July as compared to 10,516 units during the same month of last year and 13,967 units sold in June 2008.

Levy of five per cent federal excise duty, increase in sales tax by one per cent and fixed rates of withholding tax (WHT) have contributed to the decline of car sales.

According to analyst Bilal Hameed of JS Global Capital Limited, car sales fell by 11 per cent in 2007-08 to 147,441 units as compared to 165,268 units in 2006-07.

He linked the decline in sales in 2007-08 to uncertain political and economic conditions, halt in auto financing facilities by banks due to loan defaults, increase in interest rates resulting in expensive auto financing, increase in prices due to imposition of WHT and excise duty, further increase in prices and continued influx of used cars.