Automobiles get costlier as currency fluctuates

Updated October 25, 2018

Email

Car assemblers had jacked up prices four to five times during the current year in the wake of a depreciating rupee.— File
Car assemblers had jacked up prices four to five times during the current year in the wake of a depreciating rupee.— File

KARACHI: With recovery in rupee value against the dollar after $6 billion bailout package offered by Saudi Arabia, Chinese bike assemblers have pushed up bike prices citing devaluation of rupee against the dollar.

Country’s second largest bike assembler – United Auto Industries – has surged the price of its two wheelers (70-125cc) by Rs3,000-4,000 due to the rising cost of imported raw material on account of rupee depreciation.

The price of 100cc bike rickshaw has gone up by Rs5,000. The new prices would be effective from November 1, the company said in its circular to their dealers adding consumers offering full advance payment prior to October 31 can purchase bikes at the old rates.

The maker of Road Prince bikes has informed its dealers regarding price hike in two wheelers by Rs1,000 from October 10. However, the company has decided to further raise the prices of its 70-125cc bikes by Rs2,000-3,000 from November 10.

The maker of Hi Speed bike in its circular have confirmed a price jump of Rs3,000-7,000 in 70-150cc vehicles from November 5.

New Asia Automobiles has pushed up prices of all its brands by Rs3,000 from October 15.

Ohad Motors has announced a Rs3,000 hike in Metro motorcycle from October 20. Kausar Automobile communicated its dealers on October 23 a price increase of Rs 3,000-10,000 in 70-200cc two wheelers from November 1, owing to uncertain conditions and losing rupee value against the greenback.

Chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Sheikh said the prices are being raised due to the rising cost of imports of parts and kits in view of the recent rupee slide.

“In case $1 comes to Rs125 in coming months, the assemblers may think of bringing down the prices,” he hoped.

On October 10, rupee fell by 7.5 per cent while on October 24, it gained 1.5pc against the dollar.

Due to stiff market competition and rising cost of production, only 40 assemblers are now in operation out of 124 in the last 10 years, he claimed, urging the government to sit with the stakeholders and work on a new policy for the two-wheeler segment.

Recently, Honda Atlas Cars Ltd increased prices of various models owing to the negative exchange rate. The company informed its dealers that the prices had been raised by Rs50,000 for BR-V, Rs60,000 for City and Rs100,000 for Civic for November and December deliveries.

For January 2019 onwards deliveries, the company has raised prices further by Rs50,000 for BR-V followed by Rs65,000 for City and Rs110,000 for Civic. Indus Motor Company (IMC) also came out with price hike of Rs50,000-175,000 for November and December deliveries and Rs100,000-350,000 for deliveries from January 2019 onwards.

Car assemblers had jacked up prices four to five times during the current year in the wake of a depreciating rupee amid claims of higher localisation of parts and accessories.

It is not clear whether assemblers would make downward revision in prices in case the rupee gains against the greenback in the next few months.

“We cannot say anything right now with surety about lowering car prices on the back of rupee’s rise in future. In an uncertain environment we will ‘wait and see’,” a car assembler said.

Chairman Karachi Wholesalers Grocers Association (KWGA) Anis Majeed ruled out any instant decline in prices of imported commodities on rupee’s improving health. He recalled that traders had passed on just a 5pc jump in wholesale prices against around 8pc rupee depreciation on October 10, in view of thin demand of edible items which still exists today.

Besides, pressure on traders is building up as goods’ carriers are gradually increasing transportation charges.

Pulished in Dawn, October 25th , 2018

Download the new Dawn mobile app here:

Google Play

Apple Store