- The CBUs of this premium SUV will now cost Rs5,749,000 against its previous price of Rs5,449,000.
MG Motors Pakistan has reopened bookings for its HS variant, but with a hike of Rs300,000, taking the final price tag to Rs5,749,000.
The price-hike in Completely Built Units (CBUs) comes hand-in-hand with the Federal Board of Revenue's (FBR) move to look deeper into the reported under-invoicing controversy that enveloped MG Motors earlier this month.
MG Motors had suspended the booking process before the under-invoicing issue came to the fore. With the FBR now having completed its due diligence, MG Motors has not only resumed the booking process, but increased prices by 5.5%.
The increase also comes at a time when MG Motors Pakistan rolled out its first locally-assembled unit of the car. The company is yet to issue a clarification on whether the revised prices will also apply on Completely Knocked Down (CKD) units.
Why the price hike?
A whopping Rs300,000 hike per CBU is due to an increase in import duty by the Federal Board of Revenue (FBR), say analysts.
As Business Recorder reported earlier, JEW SEZ (Pvt.) Ltd., the company that has a joint venture with MG Morris Garages (MG) Motor UK Limited, is bringing MG cars to Pakistan. The FBR found that JEW SEZ was under-invoicing the vehicles imported from China.
An audit of the importing company pointed out that 747 MG CBUs were imported between November 2020 and February 2021, at a lower rate as compared to previous ones.
The first consignment (in May 2020) had declared the unit price of MG HS to be $14,000, MG ZS at $ 9,000 while MG ZS EV was at $22,000. However, the consignment that arrived in Pakistan between November 2020 and February 2021 priced the MG HS CBU at $11,632, and the MG ZS base variant at $9,245.
After establishing the under-invoicing, the FBR bumped up the assessable customs value of the MG SUVs by 14.5% by means of a ‘Fall Back Method’ as provided under Section 25(9) of the Customs Act, 1969.
After the hike, the customs value of the vehicles went up from $11,632 per unit to $13,314 per unit, which is likely to have had an impact on the recent price hike.
Moreover, it might not be the last time prices of MG cars are raised, and another increase can be expected at the end of this year due to recurring international trade challenges and a global chip shortage, according to Pakwheels.com, an auto sector-focused website.
MG HS is no more the cheapest SUV
With this price hike, the MG HS has been dethroned as the most economical SUV in Pakistan, now replaced by Haval’s Jolion. Nonetheless, Haval’s 2,000cc H6 still continues to be the most expensive SUV in its class with a price of Rs6.3 million.
However, it is still unclear how this price increase will impact bookings for the SUV that is now open at Rs 2,000,000. While the company celebrated a thousand bookings for MG HS in Pakistan, its customers grappled with late MG car deliveries that led to the suspension in bookings.