The automotive industry in Pakistan has progressed rapidly with the introduction of various new car firms. As the competition in the Pakistani automotive market has increased, the prices of cars moved up as well. The carmakers have increased their car prices as a result of rising input costs. This is the second time this year that the auto industry has raised car prices in Pakistan. In this article, we will talk about why car prices are increasing in Pakistan.
Automaker Increased vehicles prices:
Carmakers such as Suzuki, Toyota, Honda, Kia, and Hyundai among others have raised the price of their automobiles in Pakistan. Several companies delaying deliveries of their vehicles by several months due to increased demand. Due to the limited supply of parts on the market, several automakers have limited their products. To keep up with demand, other manufacturers like MG and Hyundai have increased the prices of some vehicles in their lineup and canceled a few versions and features.
Pak Suzuki Motors:
From April 1, 2022, Pak Suzuki Motor Company (PSMC) declared a huge increase in car pricing in Pakistan and this is the second time in 2022. The company has hiked the prices of its all models including Suzuki Alto, Suzuki Wagon R, Suzuki Cultus, Suzuki Bolan, Suzuki Swift, Suzuki Ravi, Suzuki Jimny, Suzuki Vitara, and Suzuki APV. The Prices have been raised from Rs. 1,546,000 to Rs. 1,675,000 by the corporation.
Toyota Indus:
Indus Motor Company has hiked the prices of all Toyota vehicles from March 23, 2022. The corporation has raised the price of its numerous models by up to 1,257 million in Pakistan. The prices of various models such as Toyota Corolla, Toyota Yaris, Toyota Rush, Toyota Fortuner, Toyota Revo, and Hilux increased by the company.
Honda Atlas:
Honda has also raised its car prices, from March 26, 2022, in Pakistan. It is not surprising as the others car dealers have increased their car prices for the second time this year. As per the notification, the company has hiked the prices of its various models by as much as Rs. 400,000. The company has increased the prices of its models such as City 1.5L CVT, 1.5L City Asp MT, 1.5L Asp CVT, BR-V CVT, City 1.2L MT, and CVT models.
Hyundai Nishat:
Hyundai Nishat has raised the prices of its cars, leading in the footsteps of Honda Atlas, Toyota Indus, and Pak Suzuki. The company has hiked the prices of its three models Hyundai Elantra GLS, Hyundai Sonata, and Hyundai Porter. The company also increase the price of its vehicle Hyundai Tucson FWD and AWD. The price of its most popular vehicle raised up to RS. 400,000. The company has implemented the new car prices from 5th May 2022.
Reasons for car prices Increased:
These are the reasons why car prices are rising in Pakistan. According to the representative of the car industry, the increase in car prices is due to increased input costs such as high shipping charges, devaluation of Pakistani rupees, and a rise in prices of petroleum and raw materials.
Rupees Depreciation Against US Dollar:
The constant devaluation of Pakistani rupees against the US dollar is the major reason for the prices of vehicles increased in Pakistan. Pakistan’s automotive industry assembles cars in Pakistan through imports. They import vehicles with the high payment of duties and taxes. As a result, with the increase in taxes, the prices of vehicles also went up in Pakistan. The adverse parity of the rupee-dollar and hiked duties and taxes on the sector led to an increase in car prices in Pakistan.
Increased Freight Rate:
The increase in freight rate is another important factor in the car prices raised in Pakistan. A freight rate is a cost of transporting a specific cargo from one location to another. The freight rates have risen by more than 250 percent in a year. The rise in freight charges has affected practically every industry, including the automobile industry. The freight rate raises due to the high value of the US dollar in the global market. As we told you Pakistan assembles vehicles through imports, with the increase in transportation rate, the prices of vehicles also raised in Pakistan.
Raw material cost increase:
Another major reason for the rise in the prices of cars in Pakistan is the rise in raw material prices as are operational costs. Pakistan imports automotive parts and accessories from Asian countries. The price of raw materials has become more than doubled this year. The cost of production and transporting automobiles has gone up due to the high value of raw materials prices. The automotive market has been forced to raise the prices of their vehicles again due to the increase in the cost of purchasing raw materials. Because of the high cost of raw materials and the rise in the cost of production, the prices of cars in Pakistan saw an increase of 50% in the last couple of years.
