KARACHI: More carmakers are seen hopping on the bandwagon due to cost pressures and poor rupee-dollar parity, which may have ushered in a fresh round of price hikes from the industry, according to sources on Wednesday.
According to estimates, car prices are anticipated to rise by 15%. More Original Equipment Manufacturers (OEMs) and assemblers are following in the footsteps of Indus Motor Company and Lucky Motor Company in raising automobile costs.
Given the current trend, Suzuki, Honda, and Hyundai automobile prices are projected to rise in the next two weeks.
Honda could hike the price of the City and BR-V, according to Muqeet Naeem, a research analyst at Ismail Iqbal Securities. “Suzuki may also raise car prices marginally,” he said, “since the business raised prices dramatically in November.”
Hyundai, according to Naeem, is also suffering cost challenges and may raise prices again this year.
Mashood Khan, an auto industry specialist and former Chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), predicted a domino effect in Pakistan’s auto sector, stating that “when one OEM increases car costs, others follow.”
“It is because all of the companies are facing similar cost pressures such as rupee depreciation against the dollar, increase in the prices of imported raw materials such as steel,” he explained.
Khan went on to say that there was a global shortage of raw materials in the auto industry.
He believes that growing car prices and the State Bank of Pakistan’s restrictions on auto financing will cause sales to fall in the third quarter of this calendar year, beginning in July.
HM Shahzad, Chairman of the All Pakistan Motor Dealers Association, however, believes that raising car prices will not reduce delivery times since demand is too great and the price issue will have little impact on sales.
Because of the country’s current political climate, an industry official predicted that automobile demand would remain stable.
“Buyers will buy cars whether this government stays or goes. We have always seen car sales increase in election years,” the source said.
He went on to say that during this wave of price hikes, automobile prices will rise by 10% to 15% because cost pressures were essentially the same for all OEMs.
Toyota raised automobile pricing between Rs287,000 and Rs1,260,000 on Tuesday.
In a recent corporate meeting, the Japanese automaker informed investors about the company’s current issues and future prospects, as well as a prospective price raise of 12-13 percent.
Indus Motor Company, which assembles Toyota vehicles in Pakistan, likewise predicted a 15-20 percent drop in volume in the coming fiscal year.
