ISLAMABAD – Hybrid car buyers have been waiting for some relief as high taxes pushed prices higher and kept many purchases on hold. Now, that wait is starting to pay off, with Honda HR-V and Toyota Corolla Cross hybrid models receiving major price cuts following the GST reduction.
Prices of hybrid electric vehicles (HEVs) in Pakistan have started falling as major automakers pass on the benefit of the recently reduced general sales tax (GST) to consumers. GST on vehicles with engine capacities of up to 2,000cc was reduced from 25% to 18% effective September 13, but assemblers initially delayed revising their prices. Nearly two weeks later, new price lists have started emerging, bringing significant reductions for several popular hybrid models.
| Model | Old Price | New Price | Price Cut |
| Honda HR-V e:HEV | Rs10.369 million | Rs9.299 million | Rs1.07 million |
| Honda HR-V VTi-S | Rs7.799 million | Rs7.299 million | Rs500,000 |
| Toyota Corolla Cross HEV X | Rs10.299 million | Rs9.729 million | Rs570,000 |
| Toyota Corolla Cross HEV | Rs9.849 million | Rs9.299 million | Rs550,000 |
Honda Atlas Cars Ltd (HACL) has cut the price of its HR-V e: HEV by Rs1.07 million, bringing it down from Rs10.369 million to Rs9.299 million. HR-V VTiS has also become cheaper, with its price reduced by Rs500,000 from Rs7.799 million to Rs7.299 million.
HACL said the revised prices are available for limited stock, with the new rates applying to orders invoiced from September 25.
Indus Motor Company has also reduced prices for its hybrid lineup. Toyota Corolla Cross HEV X now costs Rs9.729 million, down by Rs570,000, while the price of the Corolla Cross HEV has been reduced by Rs550,000 to Rs9.299 million.
The price reductions come after months of uncertainty in Pakistan’s automotive industry over taxes and the government’s future policy framework.
Automotive Industrial Development Policy 2021-26 expired on June 30. Under the previous policy, electric vehicles were subject to an 8.5% GST rate.
The industry had expected a new auto policy to take effect from July 1, but the replacement policy has yet to be announced. Automakers have said the prolonged uncertainty affected production planning, investment decisions and other business operations. Some assemblers also temporarily delayed vehicle invoicing during July and August as they waited for clarity on the applicable tax structure.
The higher GST rate had a particularly strong impact on demand for electrified vehicles.
Chery Master Director Sales and Marketing Syed Asif Ahmed said the 25% GST had sharply reduced demand, leaving a significant amount of inventory unsold as consumers postponed purchases while waiting for clarity over the tax situation.
He said the 18% GST rate could help revive sales of electrified vehicles, although uncertainty remains over whether the rate could be changed again under the new auto policy.
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