Car manufacturers have decided to slow down their production due to unsold stock; this has resulted in a slowdown of new bookings and low revenues. Due to new budgetary measures, there has been a significant increase in the rates of cars. The companies are under pressure since the start of the year.
Due to non- filers issues associated with 10% Federal Excise Duty on Honda Civic which retains a 40pc share of sales. It has been reported, that Honda Atlas Cars LTD has decided to stop the production from July 12-21. It has been reported that the company is giving Saturdays off from the past two months.
The Honda dealer stated that this has turned down the production scale of Japanese cars which manufactured vehicles in double shifts a year back. The government has indeed damaged the car industry of Japanese cars with high taxes and extra charges such as 5% on customs duty.
Pakistan Automotive Manufacturers Association (PAMA) sales decreasing to 37,083 units from 39,869 units while Honda BR-V sales declined to 7,999 to 4,593. Meanwhile, Indus Motor Company has decided not to produce cars for eight days of this month.
Lastly, the overall business environment has become unstable after the budget, which is leading to strikes and protests with many shutdowns.