The government is expected to loose custom duty of Rs 4.5 billion in this fiscal year, as a result of a halt in import of completely knocked down (CKD) kits by two leading Japanese auto assemblers, Toyota and Honda, following the devastating earthquake in Japan.
An official source said that imports of two leading Japanese automakers have come to a complete stop as their plants were affected by the earthquake in Japan. However, he said that imports of Suzuki motors were not affected and they were continuing as usual. He, however, said that it was not possible to cite reasons for unaffected imports of Suzuki’s spare parts.
The stoppage of local assembly of the highly popular Toyota motors has increased the own money on the latest models to Rs 175,000, compared to Rs 30,000 to 50,000 a couple of weeks back, he said. The source further stated that own money for Honda has also gone up, while the own for Japanese brands was expected to rise further. The government is working on a plan to offset the domination of Japanese players in the local automobile sector and by allowing entry of leading Korean and Chinese auto manufacturers in the country. Currently, Japanese vehicles have 99.6 percent share in the local market. This has resulted in lack of competition and complete monopoly to charge higher prices and even an own surcharge on vehicles. To keep vehicle prices high, Japanese assemblers produced only 121,790 units during 2009-10 against the installed capacity of 269,000 units. Local assemblers were said to be uninterested in enhancing their production.
