KARACHI, June 12: Car sales continue to thrive, surging to 141,015 units in July-May 2011-2012 as compared to 121,455 units in the corresponding period of last fiscal year.
The impressive growth in sales of Suzuki Mehran and Suzuki Bolan due to the Panjab government’s Yellow Cab scheme remained one of the prime reasons in offsetting a big negative impact expected in overall car sales figures due to sharp drop in Honda Civic and Honda City sales.
Pak Suzuki will complete the delivery of 20,000 units of Bolan and Mehran in the current month. The company has been providing these two vehicles to the Punjab government since October 2011. However, the Punjab government intends to continue the taxi scheme in the new financial year by making it a part of next year’s budget and details in this regard will be announced soon.
Figures released by Pakistan Automotive Manufacturers Association (Pama) revealed increase in sales of Mehran to 32,474 units in July-May 2011-2012 as compared to 23,302 units in the same period of last fiscal year. Bolan sales swelled to 19,787 units from 12,867 units.
Suzuki Swift sales improved to 6,412 units from 3,833 units. Toyota Corolla sales surged to 41,720 units from 38,273 units while Honda Civic and Honda City sales plunged to 4,444 and 5,457 units from 6,125 and 8,573 units respectively.
Indus Motor Company (IMC) has stopped the production of Cuore from May 2012 and only 63 units were sold in May 2012 due to some back orders. Total Cuore sales in July-May 2011-2012 fell to 3,562 units from 5,544 units.
Suzuki Cultus and Suzuki Alto sales stood at 12,521 and 14,213 units in the last 11 months of the current fiscal year as compared to 10,939 and 11,552 units in the corresponding period of last fiscal year. Suzuki Liana sales dropped to 425 units from 447 units.
Despite increasing import of used cars coupled with rising prices of locally assembled cars, the local industry is getting support from rural areas owing to rising farm income thanks to good crop of wheat, sugarcane, rice and cotton coupled with rising home remittances.
An assembler said Mehran and Bolan sales gave much relief to Pak Suzuki mainly.
“Otherwise the entire car industry was struggling to survive in view of rising import of used cars which is eating away the share of locally assembled cars,” he observed.
Meanwhile, the budget 2012-2013 also remained silent on the entire auto sector and the proposals sent by the vendors and assemblers did not become a part of the new budget. The industry besides deliberating on budgetary measures prior to new budget announcement also held detailed discussions with the government on Auto Industry Development Plan (AIDP) II which would get underway from July 1, 2012.
The industry was expecting some changes in duty structure in the budget but the Finance Bill issued after the budget did not arrive with any duty change on import of parts and accessories for local assembly and even on the completely built up (CBU) units.
Director General Pama Abdul Waheed Khan said that duty on non-localised parts is still 32.5 per cent for locally assembled cars besides 50 per cent customs duty on localised parts also existed.
However, he said that through Finance Bill 2012-2013 a tax measure is introduced whereby manufacturers will be required to collect withholding tax at one per cent of the gross amount of the sale made to the distributor, dealers and wholesalers. The measure is being introduced by substituting 153A of the Income Tax Ordinance 2001.
The measure, if adapted in its present form, will levy excessive taxation on the dealers who are already registered tax payers in sales tax as well as income tax, he said.
The association analysed the case of auto dealers and it was finally accepted that their businesses did not want levy of one per cent turnover tax. SRO 549(I) 2012 dated May 22, 2012 was issued hardly a week before the introduction of Finance Bill. Through this SRO, the incidence of turnover tax on the registered motorcycle dealers has been reduced by as much as 0.75 per cent.
He urged the government that the dealers/distributors already registered under sales tax should be exempted from the newly imposed withholding tax. The new levy should be limited to the unregistered tax payers only, he said.