By Moonis Ahmed
KARACHI: One of the auto manufacturers has raised car prices up to 2 percent on its different models following hike in Japanese currency Yen, which is now at a 15-year high against major currencies, Daily Times learnt Tuesday.
Indus Motor Company’s spokesman in a statement said that the retail prices of some Corolla variants including XLI and GLI models have been raised by Rs 29,000, which translates into a 2 percent increase; however there will be no change in Altis price. After this price hike the cost of Corolla XLI with an increase of Rs 29,000 has gone up to Rs 1,354,000 as compared to Rs 1,325,000. Similarly the price of Corolla GLI now stands at Rs 1,479,000 as compared to Rs 1,450,000 previously.
Spokesman said that due to the unprecedented strength in the Yen, which is at a 15-year high against major currencies, imported CKD and even local vendor parts have become more costly. This is because most of the raw materials of vendors are also imported. The company which has been absorbing most of the costs, is forced to marginally increase its car prices with immediate effect. Since January 2010, the rupee has depreciated by 15 percent against the Yen (from 0.928 to 1.066) while the local price of the product has increased by around 6 percent. In addition, there have been increases in labor wages and utility prices, he added. All of these factors have forced the local OEMs to marginally increase car prices while absorbing most of the costs.
Further, the prolonged load-shedding is not only increasing costs but is also playing havoc with the production cycle and forecasting process, which in turn is increasing pressure on an industry already suffering from multiple challenges.