Prices of local assembled cars are set to witness a new hike since automakers are preparing to revise prices in wake of depreciating currency value, freight charges and increased raw material cost.
Syed Shabbiruddin, the Director for Sales and Marketing at Changan Pakistan while talking to SAMAA said:
“Around 70% to 80% of a typical passenger car is made up of some grade of imported steel. A car price is therefore, highly sensitive to the price of steel and the exchange rate. If steel prices go up, car prices will inevitably increase. In fact, even motorcycle producers recently also passed on the burden to their consumers. Soon car companies will also have to raise vehicle prices because of rising steel prices and the increased cost of shipping.”
This indicates that prices of cars from existing Big 3 automakers, as well as those from newcomers are expected to be increased. Explaining this, Shabbiruddin said that “An unprecedented increase in shipping costs due to the recent wave of Delta variant in South Asian countries is also putting pressure, especially on new car assemblers, to increase prices to pass on the impact.”
Hardly two months ago, government slashed various duties & taxes on locally assembled vehicles which resulted in reduction in prices of brand new cars in Pakistan. This resulted in a phenomenal increase in sales with automakers registering record-breaking sales in July 2021. However the anticipated increase in prices might affect the sales momentum of local assembled vehicles.