Indus Motor Company, the manufacturer of Toyota vehicles in Pakistan, has announced a price reduction for its Yaris sedan lineup, with decreases ranging from Rs73,000 to Rs133,000.
Following this adjustment, the prices for Yaris’ 1.3 MT LO, 1.3 CVT LO, and 1.3 MT Hi variants will be set at Rs4.326 million, Rs4.616 million, and Rs4.586 million, respectively, each experiencing a reduction of Rs73,000.
Moreover, the price of the Yaris CVT Hi has been reduced by Rs133,000, bringing its new price to Rs4.766 million. Consequently, Yaris cars will now fall under the 18% sales tax regime.
The decision by the government to increase sales tax on vehicles with engine sizes of 1,400cc and above, as well as those invoiced at above Rs4 million, from 18% to 25% has impacted the auto industry.
Initially intended for cars with engine sizes of 1400cc and above, the tax increase was expected to exclude all SUVs, including those below 1400cc. However, SUV manufacturers producing vehicles below 1400cc were unsuccessful in avoiding the tax increase, resulting in the inclusion of a Rs4 million price cap. This has affected some Toyota, Honda, and Suzuki models.
Indus Motor has temporarily halted production citing inventory shortage, amidst challenges faced by Pakistan’s auto sector due to high interest rates and increased production costs. These factors have led to higher car prices and a decline in sales. Total car sales during the first eight months of fiscal year 2023-24 dropped to 59,699 units, down 41% from the same period last year. Sales in fiscal year 2022-23 also saw a significant decline, plummeting 56% to just 126,879 units.
Auto sector analyst Usama Rauf from AKD Securities noted that subdued segment sales in recent years are attributed to increased prices, reduced consumer purchasing power, and historically high interest rates. Despite these challenges, Indus Motor’s decision to reduce Yaris prices aims to stimulate demand in the market.
