KARACHI: Pakistani assemblers of buses have started slashing prices by 15% of locally-produced and CNG buses following issuance of a notification by the Central Board of Revenue regarding zero-rated sales tax on import and local supply of dedicated CNG buses and other buses meant for transportation of 40 or more passengers.
Industry people expect increase in their sales which had remained sluggish during July-October 2006 as compared to the same period of 2005.
"I think investors will now return after a 15% drop in prices," Director Marketing and Sales, Hinopak Motors Limited (HML), Mohamed Irfan Shaikh said yesterday, adding Rs2.3mn bus chassis is now priced at Rs2.0mn while CNG bus price has also been lowered by 15%.
He said bus sales had only been restricted to government's institutional buying while the share of commercial sales had been hovering at 15-20%, out of total sales which was alarming for local industry. Bus sales started recovering from November 2006.
Rains all over the country during August-September, killing of Nawab Akbar Bugti on Aug 28, suspension of UTS scheme, investors' pull-out from purchasing new buses owing to rising operational costs, because of diesel prices and influx of used buses had made a combined effect on bus sales.
A total of 418 buses (Hino, Nissan, Master, Isuzu, Dong Feng) were sold during July-November 2006 as compared to 395 units in the same period of 2005 - up by 5.8%.
Irfan said that the arrival of 3,000 used buses from Japan and Singapore in 2006 had dealt a crippling blow to the local sales while the total bus demand of one year is just 800-1,000 units. Suspension of Urban Transport Scheme in Sindh had also slowed down sales of locally-produced buses.
He said the government had been claiming too much about the revival of UTS scheme, but in practical terms it is yet to be seen on roads.
On the other hand, locally-produced CNG buses have also been facing problems as investors have not lifted a single unit yet. Its price ranges between Rs3.8 and Rs4.0m per unit without A/C.
"The operational cost is very high and it can be curtailed, if the government provides subsidy on gas prices," he said.
Director Marketing and Sales Afzal Motors Private Limited, makers of Daewoo buses, Tahir Javed said the company would reduce prices. A bus chassis of Rs2.7mn will now cost Rs2.35mn.
All heavy vehicle assemblers had pointed out their grievances to Industries Minister Jehangir Tareen on December 19 regarding arrival of used buses and non-plying of CNG buses on roads. The minister is expected to meet the assemblers on January 10 again. - Internews |
