The Suzuki Alto, one of Pakistan’s most popular compact cars, recorded a sharp fall in sales last month. According to figures released by the Pakistan Automotive Manufacturers Association (PAMA), sales dropped by 75%, plunging from 9,497 units in June to just 2,327 in July.
The decline came after recent government taxation measures. The General Sales Tax (GST) on cars up to 850cc was raised from 12.5% to 18%, while a new NEV levy was introduced, 1% on vehicles up to 1300cc, 2% on 1301cc to 1800cc, and 3% on larger cars. Although the Alto falls below 850cc, it was still affected by these changes.
Following the tax hike, Pakistan Suzuki Motor Company (PSMC) increased the Alto’s price to Rs. 3,326,450, making it less affordable for many budget-conscious buyers, particularly first-time owners who form a large share of its customer base.
To mitigate the impact, PSMC had processed advance invoices in June for July and August deliveries, which boosted June’s sales. However, this strategy contributed to the steep sales decline in the following month.
