Haval Prices Surge as Tax Measures Impact Auto Industry
The price revisions and tax measures are expected to have a significant impact on the auto industry, with some assemblers passing on the cost to consumers while others absorb the additional cost. The move by Sazgar Engineering Works to not increase vehicle prices is a welcome relief to consumers, and it will be interesting to see how the industry responds to these changes.
Pak Suzuki Motor Company Limited has revised the prices of its entire automobile lineup, effective July 1, 2025, in response to new tax measures introduced in the Federal Budget 2025-26, with price increases ranging from Rs18,810 to Rs186,000 across its models.
The revised prices are inclusive of FED, Sales Tax, and New Economic Value (NEV) Levy, while Advance Income Tax remains excluded. The company claims that no financial or economic cost increase has been passed on to the customer, and the price revision solely reflects the increase in government-imposed levies and taxes. This move is part of a larger trend in the auto industry, where several assemblers have begun passing the impact of the new tax measures on to consumers.
In contrast, Sazgar Engineering Works has announced that it will not increase vehicle prices for end-consumers despite the imposition of a new tax in the 2025-26 budget. The company has decided to absorb the impact of the additional levy to ensure that the final payment of its vehicles remains unchanged. This decision comes as a relief to consumers, who have seen automobile prices in Pakistan surge following the imposition of a carbon levy and an increase in sales tax under the budget.
The carbon levy is charged at 1% on engines below 1300cc, 2% on engines between 1300cc and 1800cc, and 3% on engines above 1800cc. Despite the price hikes, bike and two-wheeler sales are expected to remain firm due to an increase in parts and accessories imports. The import bill for semi- and completely knocked-down kits by car assemblers rose by 41% to $950m during July-May FY25, indicating a strong demand for vehicles in the country.
The surge in car sales in Pakistan, which increased by 39% in the first 11 months of FY25, is expected to continue despite the price hikes. However, the impact of the new tax measures on the auto industry and consumers remains to be seen, and it will be interesting to observe how the industry adapts to these changes in the coming months.