Pakistan consumers urging to stop

Pakistani economy is experiencing a sudden downfall, currently everything is falling apart. Political situation of Pakistan is worsening and even though a democratic government has been established, people of Pakistan are still losing hope for a better future. Government in order to generate revenue is constantly increasing taxes and there is a constant increase in the prices of goods and services with no ending. Government is not taking any action to stop these inflation shocks to help the consumers.
Auto industry in Pakistan is one of the major industry providing employment and business to the 500,000 people, and has unfortunately suffered a lot because of the current situation. In the past prices were usually revised after the budget, which in Pakistan is announced in June of every fiscal year. This trend has now been changed, and prices in the car industry are hiking without any timeline.
Main reason for this incline in prices is due to the policies which implemented a sales tax increase up to 16%, five percent FED and fixing wht at 2.5% in current budget, besides all this increase in taxes , inflation raised the prices to about 21.5%. Increase in oil prices, and high interest rate made the situation more difficult. Moreover, a continuous increase in steel prices, by Steel Mills, increased operating cost for automotive sector. Price of steel used by automotive sector increased by Rs 7,500 per tonne in July and Rs 8,500 per tonne in August making around 12 percent increase in both months.
Pakistani consumers have been left alone, with the government shutting its eyes and ignoring the burden they have put on consumers, and watching silently the adverse effects on the economy soon automobile industry will hit rock bottom.
After a boom of about five years the demand of cars has slowed down by 55 percent. The highest decline was seen in the sales of 1300cc and above cars, which decreased to 1,382 units in July 2008 as compared to 4,701 in July 2007, showing a decline of 71 percent, the lowest since November 2003. A month wise analysis shows that not a single category of vehicles showed positive results. For example, besides 1300cc cars, there was a decline of 79 percent in 1,000cc cars, 33 percent in 800cc cars and in all categories of cars decline was 66 percent. Trucks sales lowered by 43 percent, buses 60 percent, LCVs/vans 26 percent, tractors 45 percent, motorcycles and rickshaws 17 percent. While total sales of auto sector was 29 percent less then the previous month, June 2008, 80,156 units down to 57,203 units in July 2008.
This downfall in the demand for automobiles in Pakistan is further supported by the significant and unreasonable increse in interest rates, and car financing through banks has also become expensive. Middle income group mostly been affected, interest rates in May/2008 were upto 15% and till today they have been increased upto 20%. Demand for 1000cc and 800cc vehicals has declined significantly. Beside this increase in prices of cars, cng prices were rised from RS 38.50 to 44.50.
Second hand cars are also getting out of reach of consumers belonging to middle income bracket, as this sudden increase in prices of new cars have pushed consumers to consider other options and as an effect consumers are now experiencing boost in prices of second hand cars as well.
The scenario in which people of pakistan are stuck in, if not changed soon will deprive consumers of their own mode of transport. Infrastructure and transport service is not capable enough to support the extra burden of passangers than it is right now.