KARACHI: Automobile prices may rise ­further as assemblers have only passed on seven per cent to 20pc impact to the consumers against the 26pc rupee devaluation against the dollar in the last one year.

The bike and car assemblers have raised prices four to six times in 2018 claiming that only a ­portion has been passed on to the consumers.

One dollar was equal to Rs110 in inter-bank market in January 2018 versus current rate of Rs139.

For example, Indus Motor Company (IMC), the assembler and importer of Toyota vehicles, has jacked up prices by 12-20pc in 2018.

Toyota Corolla XLI Manual Transmission (MT) is now priced at Rs2.044 million versus Rs1.819m while Corolla GLI MT now sells at Rs2.299m as against Rs1.949m. GLI automatic now costs Rs2.474m which was Rs2.024m in Jan 2018.

Fortuner Automatic carries a price tag of Rs6.799m compared to Rs5.899m while Hilux Revo is now available at Rs5.399 as compared to Rs4.649m.

Suzuki Wagon R VXR and VXL are now available at Rs1.224m and Rs1.314m compared to Rs1.029m and Rs1.069m, respectively. Cultus VXR, VXL and AGS now sell at Rs1.410m, Rs1.531m and Rs1.638m versus Rs1.250m, Rs1.391m and Rs1.528m.

Swift DLX NV and AT NV are now being sold at Rs1.555m and Rs1.691m as against Rs1.327m and Rs1.463m in Jan 2018.

Honda Atlas Cars Pakistan Ltd (HACPL) increased price by 7pc-19.7pc during 2018.

Honda 1.8L VTI CVT and 1.8L VT SR CVT are now selling at Rs2.809m and Rs2.959m as against Rs2.349m and Rs2.499m, while Honda City manual and automatic, which were selling at Rs1.549m and Rs1.689m, now sell at Rs1.854m and Rs1.994m.

From July 2017 to Dec 2018, total import bill of parts and kits of heavy vehicles, cars and bikes crossed over two billion dollars from $1.640bn in same period of July 2016 to December 2017 indicating that claim of higher localization is false.

In contrast, the import bill of completely built up heavy vehicles, cars and motorcycles (used and new) is far lower than CKD/SKD imports.

From July 2017 to December 2018, total CBU vehicles’ import bill fell to $932m from $1.153bn from July 2016 to December 2017.

Suzuki Cultus and Swift have 44pc localised parts followed by 54pc in WagonR. The local content in Mehran and Ravi/Bolan is 70pc and 68-70pc.

An official in Honda Atlas Cars claimed that Honda City is being rolled out with 68pc locally made parts while local contents in Civic and BR-V are 55pc and 46pc.

A vendor pointed out thriving imports of raw material as one of the main issues for not achieving higher localisation on which the vending industry relies heavily. Any change in rupee-dollar parity raises cost of imports. Vendors have already been struggling to get exemption of regulatory duty (RD) on import of steel parts.

However, in reality, the situation is quite reverse from the observation of Ministry of Science and Technology which in its report in 2018 expressed satisfaction about the localisation levels.

IMC Chief Executive Ali Asghar Jamali while claiming over 65pc local contents in Corolla said the rupee devaluation rate is higher than vehicle price increase.

He said CKD kits are imported while raw materials for vendor parts are not made locally due to its dimensional precision and qualitative requirements. The rupee devaluation impacts on both essential imports, Jamali added.

Spokesperson of PSMCL, Shafiq Ahmed Sheikh said the company has been doing aggressive localisation to promote vending industry and local jobs.

He said vehicle prices have been increased due to rising cost of production on account of losing rupee value against the dollar and other expenses. “We have never passed full impact of soaring cost of production to the consumers,” he claimed.

Mashood Khan, a auto parts vendor and owner of Mehran Enterprises, said the only way to control the import bill and rising product prices is to make both short and long term policies that can support the industry.

Published in Dawn, February 3rd, 2019