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Arab News
14-06-2025
- Automotive
- Arab News
IMF-backed tariff reforms raise concerns for Pakistan's auto industry despite rising car sales
KARACHI: While Pakistan's automobile manufacturers are still parsing the government's new financial plan, industry experts on Friday said proposed International Monetary Fund (IMF)-mandated reforms, such as the rationalization of trade tariffs, could erode long-standing protections for local industry. Finance Minister Muhammad Aurangzeb said the government plans to reduce the overall tariff regime by more than four percent over the next five years to steer the country toward an export-led growth model in line with the IMF program. Under the National Tariff Policy 2025-30, the government aims to abolish additional customs duties (ACDs), regulatory duties (RDs) and provisions under the Fifth Schedule of the Customs Act, 1969. The goal is to simplify Pakistan's tariff structure by reducing it to four duty slabs ranging from 0 to 15%. The IMF-backed reforms are expected to lower Pakistan's weighted average tariff by 3.2% points to 7.4%, said Shafiq Ahmed Shaikh, an automobile industry expert and former general manager of Pak Suzuki Motor Company Ltd. 'These tariff cuts will reduce protection to the auto industry along with reduction of the cost of vehicles,' he said. 'It is a very sensitive point for industry… [and] must be discussed with the stakeholders for good, long-term and acceptable solutions.' PARA-TARIFFS Abdul Waheed Khan, spokesperson for the Pakistan Automotive Manufacturers Association (PAMA), said regulatory duties are designed to protect local industry and discourage unnecessary imports. 'The ACD too should gradually be abolished because such para-tariffs are not good,' he told Arab News. Para-tariffs are taxes and duties levied in addition to standard customs tariffs, such as ACDs and RDs. While often introduced to curb imports or raise revenues, they are controversial because they can create complexity, raise costs and distort trade policy. Pakistan's federal budget also proposes raising the sales tax on 850cc small vehicles to 18% to bring parity between petrol or diesel-powered cars and hybrids. 'This would increase the cost of vehicles for middle income groups,' said Khan of PAMA, which represents the local operations of Honda, Suzuki, Toyota and 16 other manufacturers. 'This is not good for our Made-in-Pakistan policy as small vehicles will go costlier at a time when people's disposable incomes are already not so good,' he continued, declining further comment on the budget. CARBON LEVY Pakistan's automobile market, long dominated by Japanese firms like Honda, Toyota and Suzuki, has recently seen new entrants, particularly Chinese and Korean electric vehicle (EV) manufacturers like BYD, SAIC and Kia, operating through joint ventures. 'The existing industry will face good competition from EV and as we know, the future is of Electric Vehicles specially from China,' Shaikh, the automobile industry expert, told Arab News. As one of the countries most affected by climate change, Pakistan also plans to introduce a carbon levy of up to Rs10 ($0.04) per liter on petrol, diesel and furnace oil over the next two years. The move is intended 'to discourage excessive use of fossil fuels and provide financial resources for climate change and green energy programs,' Finance Minister Aurangzeb said in his budget speech earlier this week. Shaikh dismissed suggestions that the levy would raise car prices, arguing that consumers would instead begin shifting to EVs. Prime Minister Shehbaz Sharif also announced plans to impose differential taxes on the sale and import of vehicles based on engine size to promote the adoption of two- and three-wheeled EVs and reduce oil imports and pollution. Syed Asif Ahmed, general manager of marketing at MG Motors, said the 'industry is seeking clarity on recent budget.' He noted that while the finance bill was silent on hybrid electric vehicles (HEVs), social media was abuzz with reports that the government may raise the sales tax from eight % to 18 % next year. 'If true, this will jeopardize the huge investment done by almost all automakers on HEV,' Ahmed said. The MG Motors executive also warned against reduced regulatory duties on used cars and commercial imports under schemes meant for returning expatriates. '[The] used cars importers are abusing the gift, baggage and transfer of residence scheme for commercial trading,' Ahmed said. CAR SALES While stakeholders have voiced concerns over policy shifts, vehicle sales continue to show signs of recovery. Passenger car sales rose 31% in May to 11,119 units, while cumulative sales from July to May in the outgoing fiscal year increased 32% year-on-year to 94,388 units, according to PAMA data. '[The] growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation and improving consumer sentiment,' said Myesha Sohail, an analyst at Topline Securities Ltd., in a recent research note. Sohail expects this momentum to continue into the next fiscal year, driven by lower interest rates and a pipeline of new models across combustion, hybrid and plug-in hybrid categories.
Express Tribune
12-06-2025
- Automotive
- Express Tribune
Passenger car sales jump 32% in 11 months
Listen to article Passenger car sales increased by 32.1% to 94,388 units during the first 11 months of the current fiscal year compared to the same period in the previous year on account of a variety of reasons, including a dramatic fall in interest rates, back-to-back Eid festivities, anticipated price hikes ahead of the federal budget 2025-26, and others. According to data released by the Pakistan Automotive Manufacturers Association (PAMA), sales of all vehicles, including two-, three-, and four-wheelers, increased; however, sales of farm tractors declined. Sales of jeeps-cum-pickups rose by 66% to 31,706 units. Sales of trucks and buses increased by 95.7% to 3,776 units and by 73.3% to 719 units, respectively. Sales of motorcycles and rickshaws also surged by 30% to 1,378,131 units. However, sales of farm tractors fell by a dramatic 36.8% to 26,401 units. Automobile consultant and expert Shafiq Ahmed Shaikh said it augurs well that, excluding the tractor segment, other parts of the auto sector are gaining momentum as they are on an upward trend. This reflects that the auto industry is growing and regaining strength. "In my opinion, there are four main reasons. First, the reduction in interest rates — different banks and financial institutions are offering good and affordable instalment schemes. Secondly, owing to information and rumours ahead of the federal budget that vehicle prices will rise, sales have increased. Thirdly, during both Eidul Fitr and Eidul Azha, sales witnessed substantial rises as customers wanted vehicles during the Eid holidays to celebrate in a better way. Finally, credit for the significant rise in vehicle sales also goes to improved law and order, which has supported the industry, along with favourable government measures allowing the industry to flourish. In my opinion, the auto industry has the potential and capacity to grow. We foresee that the existing industry will face stronger competition from electric vehicles (EVs), as the future will mainly depend on EVs," he said. Auto sector analyst Mashood Khan said all segments of the automotive industry performed well except for the tractor segment. The motorcycle industry has continuously gained strong momentum throughout the year due to the middle class, which cannot afford expensive four-wheelers. When it comes to the auto industry overall, it has started regaining strength. Meanwhile, raising concerns about the recently announced federal budget 2025-26, MG Motors Pakistan General Manager (GM) Marketing Division Syed Asif Ahmed said the industry is seeking clarity on the budget. Hybrid Electric Vehicles (HEVs) enjoy 8.5% GST compared to 18% on EVs. This anomaly has existed for many years, giving HEVs an advantage over EVs. "Social media has reported an increase in the GST for HEVs from 8.5% to 18%. If true, this will jeopardise the huge investments made by almost all automakers in HEVs. The Finance Bill is silent on the subject, despite the Automotive Industry Development and Export Plan (AIDEP) 2021-26 commitment of no change in tariffs until June 2026. What is needed is for EV GST to be reduced to 8.5% to match HEVs," he said. He added that used car importers are abusing the gift, baggage, and transfer of residence schemes for commercial trading. Allowing commercial imports of five-year-old used cars with reduced Regulatory Duty (RD) will distort the playing field against local assemblers.
Los Angeles Times
12-06-2025
- Business
- Los Angeles Times
State sues SoCal real estate tycoon, alleging widespread tenant exploitation
Alleging widespread and egregious violations of housing and tenant laws, Atty. Gen. Rob Bonta sued Southern California real estate tycoon Mike Nijjar in Los Angeles County Superior Court on Thursday. In the lawsuit, Bonta accused Nijjar, family members and their companies of subjecting tenants to vermin infestations and overflowing sewage, overcharging them and violating anti-discrimination laws. The suit says that Nijjar is one of California's largest landlords, operating multibillion dollars in holdings. Nijjar family companies, commonly known as PAMA Management, own 22,000 rental units, primarily in low-income neighborhoods in Southern California. The suit follows a more than two-year California Department of Justice investigation into Nijjar's holdings, Bonta said. 'PAMA and the companies owned by Mike Nijjar and his family are notorious for their rampant, slum-like conditions — some so bad that residents have suffered tragic results,' Bonta said in a statement. 'Our investigation into Nijjar's properties revealed PAMA exploited vulnerable families, refusing to invest the resources needed to eradicate pest infestations, fix outdated roofs and install functioning plumbing systems, all while deceiving tenants about their rights to sue their landlord and demand repairs.' Bonta is seeking penalties against Nijjar and his family business entities, restitution for tenants, disgorgement of ill-gotten gains and injunctive relief barring Nijjar and PAMA from continuing unlawful business practices. A representative for Nijjar said he forcefully rejects the claims in the lawsuit. 'The allegations in the complaint are false and misleading, and its claims are legally erroneous,' Nijjar attorney Stephen Larson said in a statement. 'We look forward to demonstrating in court that Mr. Nijjar and his companies are not only compliant with the law, but they provide an extraordinary service to housing those disadvantaged and underserved by California's public and private housing markets.' Nijjar's real estate empire has long been on authorities' radar. In 2020, LAist detailed wide-ranging dangerous conditions at Nijjar's properties dating back years, including a fire at a PAMA-owned mobile home in Kern County that resulted in the death of an infant. The mobile home was not permitted for human occupancy, according to the report and Bonta's lawsuit. Two years later, The Times wrote a series of stories about Chesapeake Apartments, a sprawling 425-unit apartment complex in South L.A., where Nijjar's tenants complained of sewage discharges, regular mold and vermin infestations and shoddy repairs. Chesapeake had the most public health violations of any residential property in L.A. County over the previous five years, according to a Times analysis at the time. Prior attempts at accountability for Nijjar and his companies have been spotty and ineffective. After the 2016 mobile home fire that killed the infant in Kern County, the California Department of Real Estate revoked the licenses associated with Nijjar's company at the time. In response, Nijjar and family members reorganized their business structure, the suit said. The L.A. city attorney's office resolved a nuisance abatement complaint against PAMA at Chesapeake in 2018, only for the widespread habitability problems to emerge. A similar case filed by the city attorney's office against a PAMA property in Hollywood remains in litigation more than three years after it was filed. In the meantime, Nijjar's companies have settled multiple habitability lawsuits filed by residents. Bonta said that PAMA has taken advantage of lax and piecemeal accountability efforts and its low-income tenants' vulnerability. Most residents, he said, have low or fixed incomes with few alternatives other than to endure the shoddy conditions in their rentals. The lawsuit alleges that the habitability problems at PAMA properties are 'ongoing business practices' — the result of decisions to make cheap repairs rather than necessary investments in maintenance, the use of unskilled handymen, lack of staff training and failure to track tenant requests. 'Nijjar and his associates have treated lawsuit after lawsuit and code violation after code violation as the cost of doing business and have been allowed to operate and collect hundreds of millions of dollars each year from families who sleep, shower, and feed their children in unhealthy and deplorable conditions,' Bonta said. 'Enough is enough.' Besides tenants' living conditions, the suit alleges Nijjar and PAMA have induced residents into deceptive leases, discriminated against tenants on public assistance programs and issued unlawful rent increases. The suit contends PAMA's leases attempt to invalidate rights guaranteed under law, including the opportunity to sue and make repairs the landlord neglected and deduct these costs from the rent. The company has told Section 8 voucher holders that there are no units available when others are being rented to applicants without vouchers, the complaint said. The case alleges that PAMA has violated California's rent cap law on more than 2,000 occasions. The law limits rent increases to 5% plus inflation annually at most apartments. PAMA, the suit says, shifted mandatory shared utility costs, which used to be paid by the landlord, onto tenants' bills in an attempt to evade the cap. The combination of the new utility costs and rent hikes resulted in total increases of up to 20%, more than double the allowable amount, according to the suit.
Business Recorder
14-05-2025
- Automotive
- Business Recorder
April car sales down 5pc MoM in Pakistan
KARACHI: Pakistan's car sales declined 5 percent month-on-month but managed a slight one percent year-on-year increase, supported by a stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. The statistics released by the Pakistan Automotive Manufacturers Association (PAMA) revealed that car sales reached 10,596 units in April 2025, posting a marginal one percent year-on-year increase but declining five percent month-on-month. The monthly drop was largely due to highway closures in Sindh, which caused delivery delays and impacted sales. According to Topline Research, on the other hand, yearly sales growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. Moreover, the new model launches and variant introductions played an important role in attracting demand. Pakistan car sales fall 8% MoM in March 2025 Compiled data said that the total sales in the first ten months of last fiscal year (10MFY25) surged to 111,464 units which is a 40 percent higher than the previous year that was 79,596 units in the first ten months of the last year (FY24). According to PAMA's data, Sazgar Engineering (SAZEW) experienced the largest monthly sales drop, plummeting 42 percent to 549 units in April 2025. However, on a cumulative basis, the company saw a 130 percent year-over-year surge in sales to 8,576 units in the first ten months of the fiscal year, driven by the popularity of the Haval brand in Pakistan. In contrast, Pak Suzuki Motor Company (PSMC) sales dropped 12 percent month-over-month and 33 percent year-over-year to 4,003 units in April 2025. Meanwhile, Honda Atlas Cars (HCAR) achieved significant growth, rising 20 percent month-over-month and 70 percent year-over-year to 1,707 units. Indus Motor Company (INDU) sales rose 58 percent year-over-year and 4 percent month-over-month, while Hyundai Nishat increased 9 percent year-over-year but fell 5 percent month-over-month. The 2- and 3-wheeler segment saw significant growth, with sales surging 26 percent year-over-year and 6 percent month-over-month to 135,721 units in April 2025, driven by improved purchasing power amid lower inflation. This pushed 10MFY25 sales to 1.2 million units, a 30 percent year-over-year rise. In contrast, tractor sales plummeted 48 percent year-over-year to 1,602 units due to weak farm economics. On a more positive note, truck and bus sales jumped 127 percent year-over-year and 13 percent month-over-month to 520 units, taking 10MFY25 sales to 3,885 units, an 85 percent rise from 2,098 units in the first ten months of last fiscal year (FY24). Analysts noted that looking ahead, the auto sector is expected to maintain its momentum, supported by interest rate cuts, a stable rupee, and new model launches, following a strong rebound in the current fiscal year. Copyright Business Recorder, 2025
Business Recorder
14-05-2025
- Automotive
- Business Recorder
April car sales down 5pc MoM
KARACHI: Pakistan's car sales declined 5 percent month-on-month but managed a slight one percent year-on-year increase, supported by a stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. The statistics released by the Pakistan Automotive Manufacturers Association (PAMA) revealed that car sales reached 10,596 units in April 2025, posting a marginal one percent year-on-year increase but declining five percent month-on-month. The monthly drop was largely due to highway closures in Sindh, which caused delivery delays and impacted sales. According to Topline Research, on the other hand, yearly sales growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. Moreover, the new model launches and variant introductions played an important role in attracting demand. Pakistan car sales fall 8% MoM in March 2025 Compiled data said that the total sales in the first ten months of last fiscal year (10MFY25) surged to 111,464 units which is a 40 percent higher than the previous year that was 79,596 units in the first ten months of the last year (FY24). According to PAMA's data, Sazgar Engineering (SAZEW) experienced the largest monthly sales drop, plummeting 42 percent to 549 units in April 2025. However, on a cumulative basis, the company saw a 130 percent year-over-year surge in sales to 8,576 units in the first ten months of the fiscal year, driven by the popularity of the Haval brand in Pakistan. In contrast, Pak Suzuki Motor Company (PSMC) sales dropped 12 percent month-over-month and 33 percent year-over-year to 4,003 units in April 2025. Meanwhile, Honda Atlas Cars (HCAR) achieved significant growth, rising 20 percent month-over-month and 70 percent year-over-year to 1,707 units. Indus Motor Company (INDU) sales rose 58 percent year-over-year and 4 percent month-over-month, while Hyundai Nishat increased 9 percent year-over-year but fell 5 percent month-over-month. The 2- and 3-wheeler segment saw significant growth, with sales surging 26 percent year-over-year and 6 percent month-over-month to 135,721 units in April 2025, driven by improved purchasing power amid lower inflation. This pushed 10MFY25 sales to 1.2 million units, a 30 percent year-over-year rise. In contrast, tractor sales plummeted 48 percent year-over-year to 1,602 units due to weak farm economics. On a more positive note, truck and bus sales jumped 127 percent year-over-year and 13 percent month-over-month to 520 units, taking 10MFY25 sales to 3,885 units, an 85 percent rise from 2,098 units in the first ten months of last fiscal year (FY24). Analysts noted that looking ahead, the auto sector is expected to maintain its momentum, supported by interest rate cuts, a stable rupee, and new model launches, following a strong rebound in the current fiscal year. Copyright Business Recorder, 2025
