Price has no effect on luxury vehicles’ sale in Pakistan

By Jawwad Rizvi

LAHORE: No major decline has been recorded in sales of luxury vehicles despite a sharp increase in prices during the last couple of months as compared to small car business, which has been mainly affected by a drop in auto financing by commercial banks, The News has learnt.

The increase in prices of luxury cars has been caused mainly by the rupee-dollar and yen-dollar parity as the rates of CKD as well as parts have increased. The rupee-dollar parity has widened by almost 30 per cent while the yen-dollar parity has grown by almost 15 per cent.

Assemblers mainly rely on imported material for vehicles above 1300cc. The deletion levels for 800cc to 1300cc vehicles are 35 to 65 per cent thus no major increase in their prices has been registered so far.

The production of 800cc to 1300cc cars has declined by almost 40 per cent after the tightening monetary policy pushed up mark-up rate to 22 per cent that made banks very choosey in car financing.

The Rs120,000 premium above the price tag of a popular 1300cc car shows that the demand of luxury vehicles has not declined despite increase in the prices.

Source: The News, 25/10/2008

1 thought on “Price has no effect on luxury vehicles’ sale in Pakistan”

  1. “Does decrease in import duty on luxury cars has increased in demand of imported car in Pakistan. What do you feel that this policy had a negative impact on demand for locally manufactured cars?”

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