Below 850cc cars: Pak Suzuki MD voices concern over proposed GST hike

ISLAMABAD: Pak Suzuki Motors Managing Director (MD) Hiroshi Kawamura, Tuesday, voiced concern over the proposed increase in sales tax on vehicles under 850cc from 12.5 percent to 18 percent, warning that such measures could adversely affect the automotive sector.

During a meeting with Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan here, MD Pak Suzuki Motors, while discussing budgetary impact on auto sector, said that it will not have a positive impact on industry.

The SAPM, while explaining the impact of the federal budget and the proposed new tariff policy on the automotive industry, stated that since Pakistan was in an IMF programme, so, under such a situation it cannot continue providing tax exemptions to any sector as it has not served the purpose. The MD Pak Suzuki argued that the increased tax burdens are typically passed on to consumers and could lead to higher vehicle prices, reducing affordability and dampening market demand.

“The impact of higher sales tax is always borne by customers,” Kawamura remarked and cautioned that the resultant price hikes may hinder industry growth and put pressure on production.

In response, SAPM Haroon Akhtar reiterated the government’s resolve to support the auto industry, emphasising that Prime Minister Shehbaz Sharif is deeply committed to the growth of the sector and is fully aware of the challenges it faces.

“Yes, there are challenges,” Haroon stated, “but progress demands unity and collaboration. The auto industry is a vital source of employment and local manufacturing strength.”

He assured that the prime minister would not allow the sector to falter and pledged continued engagement with industry stakeholders to navigate challenges and seize growth opportunities.

In another meeting with chief of another automaker, Haroon Akhtar Khan discussed the strategic challenges facing Pakistan’s automotive industry and the potential implications of the federal budget on the sector.

Danial Malik, chief executive officer of Master Changan Motors called on the SAPM to present the reservations of the auto sector. The two sides focused on the importance of transitioning towards New Energy Vehicles (NEVs), especially electric vehicles, as a national priority. Malik emphasised the need for sustained policy support and industry-friendly measures to ensure a stable and growth-oriented environment.

Haroon Akhtar reaffirmed the government of Pakistan’s commitment to implementing a sustainable and modern auto policy aligned with global trends. He announced that the National Electric Vehicle Policy will soon be unveiled.

“The prime minister envisions Pakistan’s auto industry becoming globally competitive,” Haroon Akhtar said and added,“Our upcoming EV policy will provide a comprehensive framework for infrastructure development, investment incentives, and policy facilitation.”

He added that, in line with the prime minister’s vision, special incentives will be offered to promote the adoption of electric vehicles in the country, supporting long-term industrial growth and environmental sustainability.

Copyright Business Recorder, 2025