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Pakistani Automakers likely to raise cars’ prices from Dec-2011

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By Mohsin Khan

KARACHI: Local automotive companies are likely to increase car prices in coming days on surging cost of production by uncontrolled utility expenses and depreciation of Pakistani currency against dollar and Japanese currency.
Sources in the market said the Suzuki and Honda carmakers are likely to jack up prices of their brands.
They said Suzuki and Honda were facing a recent increase of Rs 14,000 to 159,000 or 2.1 to 3.5 percent in the price of their car brands in the month of October.
Recently, Indus Motor Company (IMC) soared its automobiles prices by 1.5 percent on the same account.
The utility expenses particularly electricity tariff and petroleum products witnessed sharp surge in the past month. Besides, the record depreciation in Pakistani rupee was seen by almost 5 percent against Japanese Yen (from 1.0980 to 1.152) and 4 percent dollar (from Rs 86 to 89) last month has forced IMC to raise prices of its different brands.
US dollar in October changed hands at Rs 87.47 against Pakistani rupee that has now increased to Rs 89.55. Such major depreciation of 2.4 percent of Pakistani rupee against US dollar has again forced these automotive companies to import costly raw material and CKD kits.
Additionally, increase in unit price of electricity and gas and the load shedding has also forced them to move to more expensive diesel fuel for electricity generation, which has also resulting in increasing costs.
The automobile companies have all set to produce new car models for next year as they received hundred thousands of booking orders. The high demand of the automobiles has pushed the cost up besides high cost of production. Auto sales witnessed a substantial growth of 20 percent on yearly basis to 70,460 units in the first five months of 2011-12 as against the sales of 58,784 units in the corresponding period of last year.

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