The automotive production plants are closed nowadays in Pakistan. The closed plants are the sign of automotive crisis. All of this happened just because of the epidemic Corona virus. It’s not just Pakistan that is affected by COVID-19. The international auto manufacturing industry is also affected by it. Geneva motor show is considered as the biggest automotive show in the world. Automakers wait for the Geneva Show to showcase their new technology vehicles. The show is canceled due to the COVID-19.
Under the safety protection, many of the countries shut down their production plants. In this situation, the demand for vehicles also decreases. In Pakistan auto industrialists already face a crisis in sales. The sale of cars down in Pakistan after the government imposed an FED tax on all vehicles. The prices were increased after FED and its impact on the sale. The other reason for hikes prices is the increase in dollar strength in the international market.
The dollar strength is increase might be it may cause increased car prices, but automakers know that this time is not good for increasing car prices.
Pakistan’s economy is including in survival. The prices of import products high in Pakistan due to the huge dollar rate. Our economy highly depends on the import of oil and the price of petroleum products is very high in the international market.
The lock down in the nationwide cut down the prices of petroleum products. After decreasing the prices of petroleum products in the international level. The government has also decreased the price of petrol in Pakistan.
Click For Details: Petrol prices reduce by PKR 15 per liter
The sale of vehicles is not only low in Pakistan because of lock down its low at the international level. The corona virus first found in Wuhan the city of China. China is the world’s largest supplier of automotive parts and vehicles. The production level down by 92% in china after this virus. The import from China completely closed.
Economic crisis:
The automotive industry is the biggest revenue of the government. The time is very tough for the government. All production activities are closed. The government has the order to lock down all industries to control the dissemination of COVID-19. Previously automakers raise the prices to meet their expenses. They have many reasons to hike prices. This time they just try to clear the stock to recover expensive. The huge decrease in sales may cause a decrease in rates of cars. Low economic activities are a massive impact on purchasing power.
The auto industry pays a high amount of taxes to the government. Closed production is a pessimistic sign for the government. The current situation not allowed them to start production work. The virus is spread through human to human. To control the virus government has banned all gathering events. Import and export are closed nationwide. The affected countries and non-affected countries of COVID-19 closed import & export to protect their country.
Sale Volume Down:
After lock down, the dealership stores across Pakistan have closed their doors. The sale of brand new cars is not available. This is a big loss for companies. It might be possible after removed lock down auto makers may offer different discounts on cars to clear the remaining units. Due to the pandemic situation the purchasing power of the consumer is also going low. Car-makers can’t stock the units in plants. They are always trying to clear the stock and enhance production activity. They already offer a different discount to enhance their sales volume after imposed FED tax. The consumer is always attracted by discount offers.
Hold Up New Models Launching:
It takes time for stable economic activities. Under the low economic activities, it’s not good for investors to invest more money in the auto sector. Might be they offer a discount on current vehicles to introduce new. To invest the money on new technology is not good in this circumstances. Stakeholders of EV policy have requested to the government to hold up electric vehicle policy. It’s mean they knew that this time is not perfect for investing in the auto industry.
visit: Auto Sector Ask For Hold Up EV Policy
The holds up working on electric vehicle policy shows that everyone knows economy takes time for a better position. The international market is working very fast on EV policy. In Pakistan Tehreek-e-Insaaf government has started working on it. The purpose of the policy is to reduce the import of oil. Stakeholders invest a high amount on it because they know this is a long term profit plan. They ask the government to delay because this time is tough for already exciting vehicle sales.
The local automakers also hold up there plans to invest in the auto sector. In Pakistan automakers import vehicle parts from China and Japan. They have to pay high custom duties. The dollar strength is very against Pakistani rupee. These two factors highly impact on the prices.
PAK Suzuki & Honda Atlas updates:
PAK Suzuki and Honda Atlas are Japanese auto manufacturers working in Pakistan. These are the two big companies that provide motorbikes and cars in Pakistan. They are provided petrol engine cars in Pakistan. The production of hybrid cars does not start in Pakistan. Both companies have a plan to manufacture hybrid and electric cars in Pakistan. Now they have postponed their plan and called the Engineering Development Board (EDB) to hold up this policy. The investors know that time goes very tough. To hold the stock is not possible, over time consumers want new design and technology.
Toyota Yaris Launching Postpone:
Toyota is a Japanese biggest vehicle production brand. It’s working in Pakistan as Indus Motor Corporation (IMC). The company has the plan to replace its top-selling car Corolla with Yaris. They have complete the process of production and ready for launching. The launch is a delay due to the epidemic situation. This is a very bad situation for them to introduce Yaris and enhance its sales. Might be they will decrease the price of Yaris to engage their customers.
Final Lines:
The decrease in car prices is not only good for the consumers this time it’s also beneficial for automakers. It is better to sell the vehicle at low prices as compared to hold the stock in plants. Automakers are waiting for removing lock down and start their daily activities. The closed production plants create worries for them to pay the salaries. The overall performance of production is low in Pakistan. The above statement of PAK Suzuki and Honda Atlas shows that they have no plans to introduce new vehicles.
Yet it does not confirm what results are come after the lock down. The above information is mentioned according to the current situation. While it’s confirmed after lock down that automakers hike the price or decrease the price to engage its consumers.
The above information is from our side. Stay connected with Auto Deals for more updates related to the automotive industry.
