Saturday, April 20, 2024

Government to introduce new car financing scheme under the upcoming auto policy

According to the news, the Govt is about to introduce a new car financing scheme with a lesser interest rate of 5 to 6% to provide ease to their regular customers, who cannot purchase a car after major price hikes during the last few years.

As per sources from the Ministry of Industries and Production, the goal of this project is to familiarize the sales of reasonably priced compact cars (i.e., 850 cc-1000 cc,) endorse localization in locally assembled cars. Though, the funding mechanism will also be expanded to include cars of above 1000 cc.

While in a recently conducted meeting on the suggested new auto policy, Makhdum Khusro Bakhtyar, the Federal Minister for Industries and Production, said:

“The aim to introduce a new policy is to promote sales of affordable small cars i.e. 850 cc-1000 cc, promote localization in domestically assembled cars, produce an exportable surplus of auto-parts of 2-3 wheelers, and increase the competition in the local market so that people in Pakistan could enjoy better technology at affordable prices.”

Besides the financing facility, the Govt has also revealed the decrease in the general sales tax (GST) on locally assembled cars up to 850cc to 12.5% from 17pc in the budget 2021-22 after that exclusion of FED and value-added tax to offer relief to small car purchasers. The small car-making local companies, especially the Pak Suzuki Motors Company Ltd (PSMCL) will appreciate a concession.

According to sources, interested parties in the auto sector have also agreed to give incentives for hybrid vehicles in the following policy (2021-26), like what they have granted to electric cars.

 Additional Secretary Ministry of Industries and Production, Hamid Atique, stated that the ministry was trying to cover up the tax part of the upcoming auto policy which is to be incorporated into the FY22 budget. “The remaining part of the policy would be finalized during next month,” he said.

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