In Case You Missed It: What Happened in Pakistan’s Car Market This Week?
To call the ongoing first week of November 2021 an eventful period in the auto industry might be an overstatement, yet some interesting developments did occur in the past few days.
Most of the news stories this week offer a foresight of the Pakistani car market into the near future. Some are promising, while others do not bode well for motorists, car buyers, and enthusiasts alike.
This weekly news round-up will go over the significant developments in week one of November 2021, and will discuss how each will likely impact the car market in the coming days:
A New Sales Record by Toyota
Earlier this week, Toyota Indus Motor Company (IMC) made a celebratory announcement of having sold 7001 units in October 2021. With this achievement, the company broke its previous record of 6,775 vehicle sales in July 2021. The company also claimed that it is their highest monthly sales number to date, since 1993.
Market sources speculate that the demand for Toyota is particularly high due to the lower delivery time of its vehicles.
Its most popular sedan, Toyota Yaris, is delivered to customers in just two months. Conversely, the delivery time of Yaris’ competitors namely, Honda City and Changan Alsvin, is up to 5 months and 4 months respectively.
Interestingly, during an official meeting that discussed the company’s financial results during the 2020-21 fiscal year, a company spokesperson said that there is no major chip shortage issue hindering their production.
Instead, the company will be increasing the production volume by 20 percent in the near future to meet the rising demand for vehicles. The company will also invest $30 million in the up-gradation and extension of its existing plant, to begin the local assembly of Hybrid Electric Vehicles (HEVs) in Pakistan.
Toyota IMC has always been regarded as the strongest automaker in Pakistan due to its diverse product lineup and the high demand for it. With the high demand complemented by a swift supply, the company is likely to remain unthreatened in the Pakistani car market. Or will it?
With the ongoing issues such as incessant freight costs, surging rates of raw materials, and devaluation of the local currency, the automakers seem to be on the precipice of jacking up the prices of their vehicles.
Toyota IMC is likely to be at the forefront of the new wave of price hikes, as the CEO of the company and chairman of the Pakistan Automotive Manufacturers Association (PAMA) has been whispering warnings about an impending increase in car prices for quite some time.
Jamali informed that the prices of steel have climbed by 215 percent since March 2020. The price of aluminum has also gone over $3000 per tonne, while that of copper increased to over $10,000 in October 2021.
He highlighted that Toyota IMC raised its prices last time in April 2020 when the exchange rate of the Pakistani Rupee against the US Dollar was around Rs. 161. There has been a massive fluctuation in the value of the dollar since then, which has increased the operational expenses for all the automakers in Pakistan.
This implies that, although the demand and supply for Toyota cars will remain unhindered, now is the best time for car buyers to buy a Toyota vehicle, or any other vehicle, before the price hike takes effect.
A Surprise Increase in Petrol Prices
Late last night, the government announced a massive increase in the prices of petroleum products.
As per the latest notification from the Ministry of Finance, the prices of petrol and High-Speed Diesel (HSD) have gone up by Rs. 8.03 per liter and Rs. 8.15 per liter respectively, while those of kerosene oil and Light Diesel Oil (LDO) have been upped by Rs. 6.27 per liter and Rs. 5.72/liter respectively.
The increase has taken the prices of petrol and HSD to Rs. 145.82 and Rs. 142.62 per liter respectively, while those of kerosene oil and LDO have climbed up to Rs. 116.53 and Rs. 114.07 respectively.
The Prime Minister had instructed the Ministry of Finance to keep the fuel prices the same during the recent protest by Tehreek-i-Labbaik Pakistan, which led to an understanding that the prices were kept the same to provide relief to the masses, which later turned out to be untrue.