KARACHI, May 18: Two car assemblers have increased prices of newly-assembled cars by Rs20,000 ahead of the budget for 2004-05, while two other makers are in a fix whether to absorb the prices or follow the suit.

Dewan Farooqui Motors Limited (DFML) on Tuesday announced a price increase of Rs20,000 and Rs10,000 for Hyundai Santro models and Shehzore pickups, respectively. The new prices would be effective from May 19.

An authorized dealer of DFML said that new Santro Club car would now be available at Rs519,000 as compared to Rs499,000, while Santro Executive model would now carry price tag of Rs579,000, as against Rs559,000. The Shehzore pickup price will now be tagged at Rs599,000 from Rs589,000.

The dealer said that the company had issued a circular, linking price hike to rising steel sheet prices in the backdrop of steel crisis few months back coupled with a rise in freight charges.

Last month, Honda Atlas had introduced a new model of Honda Civic with an increase of Rs20,000 on all its models without giving any reason. It has been a favourite practice of the assemblers to increase the price whenever they introduce new models with some cosmetic changes.

However, Pak Suzuki Motors Limited (PSML) and Indus Motors Limited (IMC) are carefully watching the situation from the sidelines by currently absorbing the impact of rising steel sheet prices.

An official at PSML said that imported steel sheet prices had increased by 27 per cent since the steel crisis, caused by heavy buying by China in world markets. The company, he added, had so far been absorbing the impact.

He did not say whether the company would pass on the impact of rising steel prices to the consumers in future or would continue to absorb the impact of steel prices till the budget announcement in June.

The prospective buyers have witnessed the price hike in cars at a time when the government has been continuously building up pressure on the car industry to curtail prices for at least six months.

Last year, Pak Suzuki and Honda had cut prices by Rs3,000-17,000 on various models just to show that how deep they followed the government's instructions. However, the makers of Toyota had rejected the government's demand for price cut.