Inflation is leaving its effect on all over the globe and it is also affecting the economy in Pakistan. Prices of everything are rising in the world including the raw materials and it is ultimately affecting the end products.
Due to the increase in prices of raw materials, Problems in shipments, and shortage of vehicle chips, the automakers have decided to increase the consumer prices of vehicles very soon.
According to the reports Auto Manufacturers have already decided to increase the prices from the 1st of November and currently, they are holding prices just on government request.
According to the new auto policy (2016-21) prices of all locally manufactured vehicles came down. Changan tried to increase the prices in August but the government stopped it from increasing prices. After seeing the manufacturing costs. All other auto manufacturers also planned to increase prices but after seeing the government strictness they held their horses for the time. But now the auto manufacturers have decided to increase the prices of their cars in Pakistan. Mr. Ali Asghar Jamali – The chairman of Pakistan Auto Manufacturer Association (PAMA) and CEO of Toyota Indus Motors has also said that prices of vehicles in Pakistan now can be increased anytime.
Reason
The value of the Pakistan Rupee against the dollar is decreasing daily and along with that the prices of raw materials, Expensive shipping costs, and deficiency of Semi-Conductor Chips. The auto manufacturers tried their best to keep the prices low but now they said that it is getting impossible to provide vehicles to end-users at lower prices. That’s why they have decided to increase the prices of vehicles from the 1st of November.
The recent depreciation is also the main reason behind this price increase. The analysts explained that the car manufacturers have beard the 80% impact of rupee depreciation for manufacturing costs but now it will not be feasible for the companies to bear this burden.
It is also true that the government provided many subsidies to the auto manufacturers in budget 2021-2022 but despite those subsidies, auto manufacturers are currently struggling to survive this rise in production costs, and obviously and ultimately it will lead towards the increase of vehicle final prices.
Impact
They have decided to increase the prices from the first of November but we need to see that who will be the pioneer to increase the prices. The affected party will only be the end users as they have very limited choices available and that option is also going to be expensive.
