The government plans to create a new car financing scheme with a lower interest rate of 5 to 6% to help customers who have been unable to purchase a vehicle due to significant price increases in recent years.
According to a ministry of industries and production official, the government is interested in assisting customers of compact automobiles ranging from 850 cc to 1000 cc with lower borrowing rates in order to help as many people as possible. The financing provision, however, would be expanded to cars with engines larger than 1000 cc.“The proposed rate for little cars is around 5%,” the official stated, “while a rate of 6% is indicated for cars with more than 1000 cc.”
“The facility might improve auto sector sales, which would lead to more business and job opportunities,” he added, adding that the facility was now being discussed with stakeholders.
During a recent meeting on a proposed new auto policy, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar stated that the goal of the new policy is to provide affordable small cars (850 cc-1000 cc), promote localization in domestically assembled cars, produce exportable surplus auto parts for 2-3 wheelers, and increase competition in the local market so that Pakistanis could benefit from superior technologies at a lower cost.
Apart from the financing facility, the government has declared in the budget 2021-22 that the general sales tax (GST) on domestically produced cars up to 850cc will be reduced to 12.5 percent from 17 percent, with federal excise duty and value-added tax exemptions to provide assistance to small car customers. The concess will benefit local small car manufacturers, particularly Pak Suzuki Motor Company Ltd.
