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Indus Motor hikes prices of Toyota cars due to rupee depreciation

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By Moonis Ahmed

KARACHI: Indus Motor Company has raised the retail prices of different cars on account of raising raw material prices and appreciation of yen and dollar against rupee.
The company has raised the retail price of all Corolla variants with immediate effect to partially offset cost increases it has been forced to absorb, apparently due to the depreciating rupee and other inflationary conditions affecting the economy. The Company increased the prices by about 2 percent, which translates into Rs 20,000 on the popular 1300cc Xli, Rs 30,000 for the GLi, 1800cc category and diesel variants.
Raza Ansari, Director Marketing told Daily Times that currently there is a misconception that the local auto industry is continuously and unjustifiably increasing prices, which is unfortunate and far from reality. The Corolla prices have remained unchanged since October 2009, while during this period the rupee has depreciated 5 percent against yen, which translates to over Rs 30,000 per vehicle on imported CKD and over Rs 10,000 in local vendor parts. In addition, there have been increases in labor wages and utility prices.
He said that all these factors have forced the local OEMs (Original Equipment Manufacturers) to marginally increase car prices while absorbing most of the costs, which has squeezed their margins and reduced profitability.
He further said the delivery of vehicles to customers who have already booked and paid prior to this announcement date would not be affected and that the Company would fully absorb the cost impact on orders in hand. IMC also working closely with the vendors to expedite there supplies, which at times become serious bottleneck for the OEMs. The Company has undertaken measures to deliver vehicles to genuine customers and continues to battle the menace of investors capitalizing on market dynamics. The Ministry of Industries is requested to implement suggestions of mandatory registration for 6 months or heavier transfer fee in case of ownership change with in the first 6 months of purchase of vehicle to curtail the market malpractice of premium, Raza said. All Pakistan Motor Dealers Association Chairman, H M Shahzad expressed surprise over the stance of the auto industry that it was doing its best in absorbing the negative impact of rising production cost.
He urged the government to check whether these increase by the assemblers were really justified with the actual impact of falling rupee, rising metal and steel sheet prices and petrochemical items.
Moreover, Shahzad urged the government to reduce the taxes on imported vehicles. “Importers are paying 360 percent overall duties as compared to 120 percent in 2007-08. Cost pressure is also likely to aggravate due to weak rupee against dollar and yen and higher steel prices, which might put a grim impact on sales of local cars,” an analyst said.\02\24\story_24-2-2010_pg5_3

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