KARACHI: Makers have raised the prices of locally-assembled cars and brand new imported vehicles by more than the actual losing value of the rupee against the Japanese yen and the US dollar in the last one year.
Assemblers, while raising the prices in the past, have always specifically blamed the falling rupee against major currencies in their press statements.
A leading carmaker claimed that the yen has appreciated by 13 per cent against the rupee in 2011-2012 as compared to 2010-2011; while the rupee has depreciated by over nine per cent against the US dollar in the same period. However, car analysts believed that the rupee has depreciated by 10 per cent in the last one year against the Japanese yen.
The assemblers had also raised the prices of new imported vehicles which they had been importing for the past few years on currency fluctuation basis which also exceeds in many cases if compared with the actual devaluation of the rupee against the yen and dollar.
For instance, two leading car assemblers had raised the prices in June by up to Rs75,000 to bring out the cost of transformation of vehicles to Euro II standards by installing catalytic converter.
On July 2, 2011 Suzuki Mehran VX was available at Rs467,000 which is now priced at Rs555, 000; Mehran VXR now sells at Rs607,000 as compared to Rs519,000 in July, 2011; Cultus VXR is now available at Rs965,000 as compared to Rs865,000; Bolan VX petrol and Ravi Petrol are priced at Rs634, 000 and Rs582, 000 as compared to Rs546,000 and Rs494,000, respectively; Suzuki Liana’s manual transmission is now sold at Rs1,382,000 as compared to Rs1,170,000.
Suzuki APV 1.5L petrol was available at Rs1,859,000 in July, 2011 as compared to its current price of Rs2,099,000; Swift RS DX is now available at Rs1,131,000 as compared to Rs984,000. Suzuki Jimny JLX now sells at Rs2,074,000 as compared to Rs1,824,000.
Honda Civic VTi manual and Oriel are now priced at Rs1,851,000 and Rs2,043,000 as compared to Rs1,705,000 and Rs1,890,000 in July 2011; City Ivtec manual transmission now sells at Rs1,497,000 as compared to Rs1,354,000 in July 2011.
According to Top Line Securities, Toyota Corolla Xli’s price has been raised to Rs1,534,000 as compared to Rs1,379,000 on July 2, 2011; while Corolla GLi is now sold at Rs1,669,000 as compared to Rs1,482,000 in July 2011.
However, an official, in the Indus Motor Company did not agree saying that Corolla Xli and Gli in July, 2011 were available at Rs1,394,000 and Rs1,519,000, respectively. Top Line Securities’ analyst said that Toyota Corolla Altis’s current price is Rs1,899,000 as against Rs1,705,000 a year back, while Altis SR model’s price is Rs1,994,000 as compared to Rs1,795,000; Toyota Hilux 4x2 SC model now sells at Rs1,759,000 as against Rs1,519,000; while Hilux 4x2 SP Model is now available at Rs1,799,000 as compared to Rs1,559,000.
One of the leading car assemblers said that the main impact on the increase of car prices was because of currency variation otherwise there was no impact on any budgetary measures in taxes and duties during the last one year.
Other reasons of jacking up car prices was the impact of ocean freight in importing completely knocked down (CKD) kits from abroad. Besides, the industries also suffered the cost of running their factories on generators in view of load shedding while there was also an increase in the wages of the workers, he added.
The Chief Executive Top Line Securities Mohammad Sohail identified four main reasons of price hike in cars. One was the impact of currency turbulence followed by inflationary trend in utility charges which the assemblers passed on to the end users.
He added that other reasons included high cost of introducing Euro II vehicles while it seems that the assemblers have also marginally increased their profit margins.