Latest news with #PakSuzuki


Business Recorder
16-07-2025
- Automotive
- Business Recorder
Automobile CKD market projected to grow over 20pc
LAHORE: Automobile CKD market is projected to grow by more than 20 percent this year and Pak Suzuki is well positions to retain its 45 percent market share, Hiroshi Kawamura, CEO & Managing Director of Pak Suzuki Motor Company Limited (PSMCL) said, while reaffirming its longstanding commitment to Pakistan's automobile industry. On the exports front, Kawamura noted that in the past Pak Suzuki had exported over 3,000 Ravi pickups to Bangladesh & Nepal and spare parts and accessories to Europe, Japan, Vietnam, and Indonesia. During a media briefing here Tuesday, he reaffirmed the company's commitment to supporting government export initiatives, stating, 'We are actively exploring new markets and test marketing our products in multiple countries.' Reflecting on Suzuki's pioneering journey and over four decades of presence in the country, Kawamura stated 'Pak Suzuki has always remained committed to its mission of providing affordable mobility to enrich the lives of people of Pakistan. For Suzuki, Pakistan holds a special place—it was the first country outside Japan where Suzuki began automobile production in 1975, even before the formation of Pak Suzuki in 1983. Over the years, Suzuki has earned the trust of over 2.5 million customers, becoming a household name synonymous with reliability and value.' Kawamura highlighted Pak Suzuki's efforts in building up the largest nationwide network of 175 dealerships outlets across more than 100 cities—three times larger network than any other OEM in the country. CEO PSMCL highlighted Pak Suzuki's pioneering role in developing the local vendor base in Pakistan. He said that over last four decades, Pak Suzuki has nurtured more than 100 local parts suppliers and supported several local suppliers through technical assistance and joint ventures paving the way for localization of high-tech parts. Now these local vendors a supplying auto parts to all other OEMs. He stated that 'Pak Suzuki procure approximately PKR 50 billion worth of local parts annually.' While emphasizing the Pak Suzuki commitmen to local market he stated, 'We invested billions of rupees in the development and localization of our new model Suzuki Every alone, we remain steadfast in driving the economic growth and job creation in Pakistan.' Addressing recent policy proposals, Kawamura expressed serious concern regarding the potential liberalization of used vehicle imports and increasing the permissible age limit to five years. 'The domestic auto industry is operating at just 40 percent of its capacity, with the entire supply chain—from vendors to dealers—under significant pressure. Imported used vehicles have already captured 25percent of the market. Any further relaxation in import policy could prove disastrous for the local industry, leading to widespread job losses and collapse of the entire value chain,' he cautioned. 'No country in the world; with an established domestic auto industry allows such an influx of used vehicles.' He also commented on the National Tariff Policy 2025–2030, which proposes across the #board tariff reductions to promote export-led growth. While welcoming reductions in raw material tariffs to enhance local competitiveness, he cautioned that reducing import duties on finished goods—such as lowering CBU vehicle duties to 15percent—would severely undermine local manufacturing viability. 'With a total annual production of around 300,000 units, Pakistan's auto sector is still in a developmental phase and does not yet benefit from economies of scale. Premature tariff reductions and used vehicle liberalization would derail decades of industry progress,' he added. 'Australia's local auto industry collapsed due to similar liberalization—a fate we must avoid in Pakistan.' With an annual production volume of approximately 300,000 units, Pakistan's auto industry is still in a developing phase and lacks the economies of scale enjoyed by countries producing over a million units per year. According to him, implementing steep tariff reductions on finished vehicles and liberalization of used vehicle imports at this stage would place local industry at a severe disadvantage, risking a shift toward import dependence and undoing decades of progress in building domestic capacity, supply chains, and employment. In fact, Australia's entire car industry disappeared due to import liberalization. This will be irreversible situation for Pakistan. Kawamura said the key focus of Pak Suzuki's strategy for sustainable development is to rely on locally available resources. Pak Suzuki's Biogas Project aims to convert bio waste into a clean and renewable fuel. 'Using biogas as automobile fuel could be a breakthrough solution for Pakistan,' Kawamura stated, adding: 'It has the potential to improve the trade balance, protect the environment, and create employment in the rural areas of Pakistan.' Copyright Business Recorder, 2025


Express Tribune
17-06-2025
- Automotive
- Express Tribune
GST hike feared to hit auto sales
Listen to article Pak Suzuki Motor Company has cautioned the government that the proposed increase in general sales tax (GST) in the budget for fiscal year 2025-26 may result in a significant decline in sales of the auto industry, which will negatively impact original equipment manufacturers (OEMs) as well as vendors. Discussing the negative impact of 18% GST, Pak Suzuki Managing Director Hiroshi Kawamura said that it would also affect employment across the automotive value chain, according to sources. He mentioned that economic growth was sustainable with 12% sales tax and any further increase would impact the entire auto industry. At present, around 2.5 million direct and indirect jobs are being provided by the automobile industry. "This number may further increase if 12.5% GST continues in this category," he said. Hiroshi Kawamura held a meeting with Special Assistant to Prime Minister on Industries Haroon Akhtar Khan on Tuesday to review the impact of the budget and the proposed new tariff policy. "The impact of higher sales tax is always borne by customers," Kawamura remarked. He voiced concern over the proposed increase in sales tax on vehicles below 850cc engine capacity from 12.5% to 18%, warning that such measures could adversely affect the sector. He stated that the tax hike could lead to higher vehicle prices, reducing affordability and dampening market demand. The price increase may also hinder industry growth and increase pressure on production. In response, the PM aide reiterated the government's resolve to support the auto industry as Prime Minister Shehbaz Sharif was committed to the sector's growth and was aware of the challenges. "Progress demands unity and collaboration. The auto industry is a vital source of employment and local manufacturing strength," he remarked. Haroon Akhtar assured the MD that the PM would not allow the sector to falter and pledged continued engagement with industry stakeholders to help navigate challenges and seize growth opportunities. Separately, the PM special assistant held a meeting with Master Changan Motors CEO Danial Malik to discuss the strategic challenges faced by the auto industry and potential implications of the budget. They deliberated on the importance of transitioning to New Energy Vehicles (NEVs), especially electric vehicles, as a national priority. Malik stressed the need for sustained policy support and industry-friendly measures to ensure a stable and growth-oriented environment. Haroon Akhtar reaffirmed the government's commitment to implementing a sustainable and modern auto policy aligned with global trends. He announced that the EV policy would be unveiled soon. "The prime minister envisions a globally competitive auto industry," he said. "Our EV policy will provide a comprehensive framework for infrastructure development, investment incentives and policy facilitation." He added that special incentives would be offered to promote the adoption of EVs, which would support long-term industrial growth and environmental sustainability.


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.


Business Recorder
10-06-2025
- Automotive
- Business Recorder
Budget 2025-26: auto sector faces mixed fortunes amid tariff reforms, carbon tax
Pakistan's auto sector navigated a complex landscape following the announcement of the federal budget for 2025-26, as Finance Minister Muhammad Aurangzeb unveiled a raft of tariff reforms aimed at aligning with global trade norms and International Monetary Fund (IMF) recommendations. While the government touts these reforms as steps toward export-led growth and trade liberalisation, industry stakeholders are voicing concerns about the adverse impact on local manufacturing. Under the new budget, Additional Customs Duty (ACD) and Regulatory Duty (RD) are set to be reduced to zero by 2030. The fifth schedule will be eliminated, and Customs Duty (CD) will be capped at 15%. Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals 'for a competitive economy' It will be reduced to zero percent by 2030. These changes, according to the government, are part of a long-term National Tariff Programme aimed at boosting exports and ensuring smoother access to global supply chains. However, domestic players fear the reforms could weaken Pakistan's already fragile local manufacturing base. 'The new carbon tax will increase vehicle prices, while reduced RD on imported cars will make them cheaper — making imports more attractive and local manufacturing less competitive,' a senior official from a local car manufacturing company said. Meanwhile, Mashood Khan, an auto sector expert, warned that the reforms reflect IMF directives rather than domestic industrial priorities. 'The downward trend in ACD, RD, and CD will likely hit local manufacturing instead of boosting exports. Without a thriving domestic industry, our import bill will rise and foreign reserves will suffer,' he said, urging the finance minister to revisit the policy before parliamentary approval. Khan added that auto parts and related industries would face significant challenges without a clear strategy to support industrialization. 'It's unclear how exports will grow without strengthening the local base,' he noted. Offering a more optimistic view, Shafiq Ahmed Shaikh, an automobile consultant and former Pak Suzuki official, welcomed the overhaul. 'This is a good move. A gradual reduction in duties will help Pakistan integrate with global markets and secure better FTAs and PTAs,' he said. He noted that duties could fall from 20% to 15% over the next five years and emphasised that aligning tariffs with international norms would bring policy stability and encourage export-oriented investments. However, Shaikh cautioned that the removal of the 12.5% concessional sales tax on vehicles under 850cc would hurt lower- and middle-income consumers. The standard 18% sales tax will apply, increasing prices of small hatchbacks. Pak Suzuki, which leads the market in this segment due to its Alto 660cc, will be most affected. Aurangzeb defended the move, arguing that automakers were not passing on the tax benefit to consumers, making the concession ineffective. Key highlights of Pakistan budget for 2025-26 Osama Naeem, an auto analyst at AKD Securities, said, 'RD on vehicles above 3,000cc will be slashed from 90% to 50%, but details for lower engine sizes are awaited. This reduction in RD will hurt local assemblers who face competition from cheaper imports.' He further said the ACD cut would impact imported completely built units (CBUs) more than local manufacturers, as the latter apply it primarily on parts and raw materials.


Business Recorder
05-06-2025
- Automotive
- Business Recorder
Suzuki Motor halted Swift car production due to China's rare earth curb, Nikkei says
TOKYO: Suzuki Motor halted production of its Swift model cars in Japan since May 26 due to China's rare earth restrictions, the Nikkei reported on Thursday. The Japanese automaker had announced the planned production stoppage of the popular model through June 6 but had not given a reason. Pak Suzuki slashes prices on Swift models Suzuki spokesperson was not immediate available for a comment when contacted by Reuters.