After the dollar’s value dropped significantly, many customers asked if the automakers would pull back on July’s recent price hike.
On various social media platforms, customers have asked automakers to reduce the prices of their vehicles as the rupiah has strengthened significantly against the dollar. Rs has dropped from Rs 248 to Rs 213 on the interbank market and on the open market it is floating around Rs 210, said Pakistan Business Forum (PBF) President Mian Usman Zulfiqar.
As a result, Indus Motor Company has passed on the prized rupee benefit to its customers on Toyota Yaris variants with a discount ranging from Rs 260,000 to Rs 103,000. In addition, the company has reduced the price from Rs 330,000 to Rs 40,000 on different variants of Toyota Corolla.
Toyota Hilux 2022 price varies from variant to variant. On various Toyota Hilux Revo models, the company has reduced the price from Rs 650,000 to Rs 8,020,000, the Japanese automaker has reduced the price of Toyota Fortuner variants from Rs 910,000 to Rs 1.14 million Rupees.
Toyota is taking the lead in announcing car discounts after the rupee rose and now all OEMs must follow suit. Automotive analyst Arsalan Hanif said it was a necessary step as consumers repeatedly asked automakers to reduce car prices.
Due to rising prices, Pakistan’s vehicle sales (including those of non-PAMA members) fell 59% to 14,000 units in July 2022 compared to June 2022 figures. Sales also fell 52% year on year.
Usman Zulfiqar says carmakers’ profits have fallen because customers can’t afford those high prices following the July price hike.
He also expressed his surprise as to why the big boys didn’t convert their factories to 100% local production. He also questioned why these companies still import CKD kits for their vehicles, when the government has granted them a license to manufacture the kits.
Given that the last price increase in April at dollar parity was 185, it is unlikely that we will see car prices fall anytime soon, given the value of the Pakistani rupee against the dollar. dollar remains higher than the Ali Asif firm’s last dollar, said an auto analyst at Aba Ali Habib Securities.
However, if the dollar stabilizes, a miracle could happen as car prices will correct (to parity when the dollar is stable), he added.
Usman Zulfiqar says the car’s quality standards don’t equate to the exorbitant prices customers pay.
In Thailand, manufacturers have produced cars with special features of higher quality. In this regard, SOPs should be issued by the regulator after studying the standards of India, Thailand and Malaysia, he added. Asad Ali, the automotive analyst at Al Habib Capital Markets, said Automakers have fixed the dollar equivalent price of Rs 235, and since then the rupee has appreciated by 10% against the dollar.
It is too early to say that car prices will fall as the rupee-dollar exchange rate is not yet stable. On the other hand, automakers raised prices to offset the impact of the sharp depreciation of the rupee and did not pass all of the inflationary pressure on to consumers. From now on, automakers will mobilize to regain profit margins that have shrunk significantly, he added.
Usman Zulfiqar, in an upbeat tone, reflects on the promise and potential of the automotive industry in Pakistan. He pointed out that we are producing excellent engineers in the field and once there is greater synergy with the industry, the results will be dramatic.