Prices of hybrid electric vehicles (HEVs) have started falling after assemblers passed on a reduction in the general sales tax (GST) rate, nearly two weeks after the lower tax took effect.
The GST on vehicles up to 2,000cc was reduced from 25 percent to 18 percent effective September 13. Assemblers had delayed price adjustments following the tax change, but new prices have now begun to emerge.
Honda Atlas Cars Ltd (HACL) reduced the price of its HR-V e: HEV to Rs. 9.299 million from Rs. 10.369 million, while the HR-V VTIS is now priced at Rs. 7.299 million compared with Rs. 7.799 million previously. The company said the revised prices are available for limited stock, with the new rates applying to orders invoiced from September 25.
Indus Motor Company has also lowered prices for its hybrid models. The Toyota Corolla Cross HEV X is now priced at Rs. 9.729 million, down Rs. 570,000, while the Corolla Cross HEV is available at Rs. 9.299 million, reflecting a Rs. 550,000 reduction.
The price cuts come after months of uncertainty for the automotive industry over the applicable tax and policy framework. The Automotive Industrial Development Policy 2021 to 2026 expired on June 30, under which electric vehicles were subject to an 8.5 percent GST rate.
The industry had expected a new auto policy to take effect from July 1, but it has not yet been announced. Assemblers have said the policy uncertainty affected production planning, business decisions and investment, while some companies temporarily delayed vehicle invoicing during July and August.
Chery Master Director Sales and Marketing Syed Asif Ahmed said the 25 percent GST had sharply reduced demand for electrified vehicles, leaving a significant amount of inventory unsold as consumers waited for clarity on the tax issue.
He said the move to settle the GST rate at 18 percent could help revive sales, although uncertainty remains over whether the rate could change again under the new auto policy. He added that most vehicles from his company and other assemblers are expected to be delivered within the next two months.
Meanwhile, Mega Motor Company, the official partner of BYD in Pakistan, said the Chinese New Energy Vehicle brand had reached 10,000 vehicles on Pakistani roads, calling it the fastest ramp-up by a new entrant NEV brand in the country’s automotive history.
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