Mini-Budget Implementation on Auto Sector – See list of expected price hikes in KIA cars
According to experts, the implementation of the mini-budget has forced automakers to increase the prices of their vehicles. The increased Federal Excise Duty (FED) and sales tax rates have resulted in severe vehicle price hikes.
Why did this happen?
The mini-budget was implemented on the auto sector to subside the steep rise in vehicle imports that contributed heavily to the high import bill. Resultantly, Completely Built-Up (CBU) vehicles were also slapped with hefty regulatory duties. This move subjected all locally assembled vehicles to FED and sales tax hikes. According to reports, the prices of all vehicles are liable to increase except for cars that have engine displacements between 1001cc and 1300cc.
FEDs on locally assembled cars
Here is the breakdown of FEDs authorized on locally assembled cars:
- Up from zero to 2.5 percent for 660cc to 1000cc vehicles.
- Remaining 2.5 percent for 1001cc to 1300cc vehicles.
- Increased from 2.5 percent to 5 percent for 1301cc to 2000cc vehicles.
- Up from five to 10 percent for vehicles over 2000cc.
Kia Lucky Motors Price Hike
Since it arrived in the Pakistani auto market, Kia Lucky Motors has maintained its prices well. However, with the implementation of the mini-budget and the recent tax hikes, the auto company is forced to increase the prices of its vehicles.
Following is a list of expected price hikes in Kia cars:
It is pertinent to mention that Kia Lucky Motors previously announced a price hike in November 2021. The previous hike resulted from increased freight charges, high raw material costs, and the devaluation of local currency. However, the Kia Sorento’s price remained the same. A similar incident cannot be anticipated this time as the government has announced a considerable tax rate hike for the 7-seater SUV segment, which is likely to drive the prices up significantly.
Regardless of the price hikes, experts believe that Kia Lucky Motors will continue to maintain its vehicle demand, except for Picanto, due to the decent purchasing power of Kia’s targeted consumer segment.
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