In response to the recent hike in sales tax for automobiles priced above Rs4 million in Pakistan, Honda Atlas has taken a proactive step by reducing the prices of two variants of its popular City model. The adjustments, effective from March 15th, aim to alleviate the impact of the tax increase on consumers.
Honda Cars announced a substantial price cut of up to Rs140,000 on the City model, with the City MT 1.2L now priced at Rs4.649 million after a reduction of Rs50,000, and the City CVT 1.2L seeing a significant decrease of Rs140,000, bringing its new price down to Rs4.689 million.
This move mirrors a similar strategy employed by Indus Motor Company, which slashed prices of its Toyota Yaris cars in response to the tax hike. Toyota had announced reductions ranging from Rs73,000 to Rs133,000 on its Yaris sedan lineup, reflecting an industry-wide adjustment to the increased sales tax of 25% on cars with engine sizes above 1400cc and those priced above Rs4 million.
Muhammad Abrar Polani, a research analyst at Arif Habib Limited (AHL), pointed out that Honda’s decision aligns with Toyota’s approach to mitigate the impact of the tax increase on higher-end automobiles in the Pakistani market.
The government’s decision to raise the sales tax specifically targeted vehicles with engine sizes of 1,400cc and above, as well as those priced above Rs4 million, transitioning from an 18% tax rate to 25%. This shift has had a notable impact on the auto industry, prompting manufacturers like Honda and Toyota to adjust their pricing strategies to remain competitive and support consumer affordability.
With these price reductions, Honda Atlas aims to maintain its market position and cater to the evolving demands of Pakistani car buyers amidst changing tax regulations.
