Auto sales growth likely to decline during FY09

KARACHI - In view of frequent price-hike in gas and petroleum products, the four wheelers’ sales growth is likely to decline significantly during the FY09.
In addition, the increase in prices due to the imposition of Withholding Tax, Federal Excise Duty and GST along with halt in auto financing facilities and rising interest rates on auto loans, charged by the commercial banks, the local cars and LCVs unit sales is expected to report negative growth of around 9 per cent in FY09.
The local auto assemblers profit is also projected to remain under pressure owing to expected exchange rate depreciation and rising costs. Since most high valued components used in assembling vehicles being imported, declining rupee has significantly increased costs of local auto assemblers.
The car dealer told The Nation on Thursday that the soaring PoL product prices badly affected their cars and Light Commercial Vehicles (LCVs) sales business and consumers were reluctant to buy any variant of new or used locally produced/imported car. The impact of increase in WHT, FED and GST directly passed on to the buyers.
According to the new price list issued by the assemblers in line with the Budget 2008-09, cars prices swelled drastically ranging from Rs 30,000 to 0.4 million on various engine capacities in terms of different taxes levied on car sales, dealer said, adding that even if the current sky-rocketing trend in oil and gas prices get continued, consumers will be scared about the maintenance of their vehicles rather than to buy a new car.
It is pertinent to mention here that since March 2008, the record three -times fuel adjustments had taken place. Currently, petrol is being sold at above Rs 86 per litre, and CNG is being available at Rs 47.25 respectively.