Suzuki Alto Sales Plunge by 75% in a Month Amid Tax Hike in Pakistan

Islamabad:Sales of the Suzuki Alto, one of Pakistan’s most popular compact cars, witnessed a dramatic drop of 75% in July compared to the previous month, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

The report reveals that Suzuki Alto sales fell from 9,497 units in June to just 2,327 units in July. This significant decline is attributed primarily to the government’s recent tax reforms.

Under the new regulations, the General Sales Tax (GST) on vehicles up to 850cc was increased from 12.5% to 18%. Additionally, a new NEV (New Excise Value) levy was introduced, imposing a 1% tax on vehicles up to 1300cc, 2% on those between 1301cc and 1800cc, and 3% on larger vehicles. While the Alto falls under the 850cc category, the increased GST still impacted its affordability.

Following the tax hike, Pak Suzuki Motor Company (PSMC) raised the Alto’s price to PKR 3,326,450. The price surge has made the vehicle less accessible for budget-conscious buyers, especially first-time car owners — traditionally the core market for the Alto.

In an attempt to cushion the impact of the tax changes, PSMC adopted an advance invoicing strategy in June, processing orders for July and August ahead of time. This temporarily boosted June sales but led to a sharp decline in the subsequent month.

The steep drop reflects growing concerns over vehicle affordability in Pakistan amid rising inflation and increased taxation.