Manufacturers Expected to Announce Huge Increase in Car Prices
Amid the rising cost of raw materials, logistical hurdles, and the chip shortage, the automakers are planning to increase the prices of vehicles very soon.
Media reports suggest that the companies are only holding back due to the government’s request, despite the ongoing supply-chain crisis around the globe. While talking to the media, an industry source added that the prices could go up by five percent, starting from November 1, 2021.
Chairman of Pakistan Automotive Manufacturer’s Association (PAMA) and CEO of Toyota Indus Motor Company (IMC), Ali Asghar Jamali, also said that the vehicle prices could go up “any time now” as the companies have been obliging the government’s request to maintain the vehicle prices for some time.
The recent depreciation of the Pakistani rupee has also played a huge role in increasing the production costs for the automakers.
Arsalan Hanif, an analyst at Arif Habib Limited, explained that the car manufacturers have sustained up to 80 percent impact of the rupee depreciation in manufacturing cost, as the CKD kits imported from other countries contain all components of the vehicles that are assembled in Pakistan.
Despite the duty and tax reliefs provided to the automakers following the introduction of the 2021-22 budget, the companies are currently struggling to maintain vehicle prices due to the rising production costs, which is gradually pushing the auto industry towards an impending wave of price hikes.