Auto assemblers raise prices after 7% GST hike

The effects of a seven percent increase in general sales tax (GST) to 25 percent have begun to be passed forward by auto assemblers.

According to a Lucky Motor Company Limited (LMCL) announcement, the price of the Stonic EX and EX + has been increased from Rs4.900 million and Rs5.400 million to Rs5.200 million and Rs5.730 million. As opposed to Rs 6.650m, Rs7.350m, and Rs7.900m, the Sportage Alpha, FWD, and AWD pricing have increased to Rs7.050m, Rs7.790m, and Rs8.370m.

The cost of the Sorento 2.4L FWD has gone from Rs 9.000m to Rs 9.540m, while the costs of the 2.4L AWD and 3.5L FWD have climbed from Rs 9.800m to Rs 10.390m, respectively. Peugeot 2008 Active and Allure prices have increased from Rs6.450m and Rs7.150m to Rs6.840m and Rs7.580m, respectively.

On March 8, 2023, 1,400cc and larger vehicles will be subject to the new GST at a 25 percent rate, according to a dealer, and many assemblers are anticipated to pass on the increased rates shortly.

Indus Motor Company (IMC) provided analysts with the following information on Friday: IHFY23 sales decreased by 52 percent year over year, and market share decreased from 20.4 percent to 18 percent.

Sales decreased as a result of components import limitations, according to a Top Line Securities note. A 50% import quota was permitted by the State Bank until November 2022. Following the transition of LC issuance to bank discretion in December 2022, several auto assemblers experienced a further reduction in import limit in the range of 25–30%.

The corporation has made additional preparations since there are no plans to reduce the number of employees, such as having management cut fuel costs by 25% and energy costs, among other things.

According to Insight Research, IMC stated that despite deteriorating economic conditions, its goal involving a $100 million investment to develop hybrid vehicles is on track. In the next days, a new version of the Toyota Revo/Hilux will be unveiled. The Toyota Yaris will thereafter undergo a similar development.