In response to the recent increase in sales tax for cars priced above Rs4 million in Pakistan, Honda Atlas has decided to lower the prices of two versions of its popular City model. This adjustment, effective from March 15th, aims to ease the burden of the tax hike on consumers.
Honda Cars has announced significant price cuts for 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 substantial decrease of Rs140,000, bringing its new price down to Rs4.689 million.
This move follows a similar strategy adopted by Indus Motor Company, which reduced prices of its Toyota Yaris cars in response to the tax increase. Toyota had announced reductions ranging from Rs73,000 to Rs133,000 on its Yaris sedan lineup, reflecting a broader industry response to the higher sales tax of 25% on cars with engine sizes above 1400cc and those priced above Rs4 million.
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Muhammad Abrar Polani, a research analyst at Arif Habib Limited (AHL), noted that Honda’s decision aligns with Toyota’s approach to lessen the impact of the tax increase on higher-end cars 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, shifting from an 18% tax rate to 25%. This change has significantly affected 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 meet the changing needs of Pakistani car buyers amidst evolving tax regulations.
