MUZAFFARABAD: Indus Motor Company (IMC) will shortly increase car prices by five per cent following devaluation of the rupee against dollar and the rising cost of production.

In the last week of December 2017 the company had raised car prices by Rs50,000-Rs60,000 in 1300cc to 1,600cc segments.

“Price will go up soon,” IMC CEO Ali Asghar Jamali on Friday told annual industry workshop, organised by IMC in collaboration with Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam).

He said prices of locally produced cars would remain under pressure due to losing strength of the rupee against the various currencies.

Cost of production has increased manifolds due to rupee depreciation, regulatory duty on raw materials and price hike of steel, fuel, copper and other factors, he said, adding that this will result in increase of retail selling price of vehicles.

Jamali said IMC has invested over Rs 4 billion to debottleneck its production facility and increase its capacity by 20 per cent to 75,000 units annually by second quarter of 2018.

He said the IMC procures Rs150 million worth of local parts every day from our local vendors amounting to Rs40bn annually which is proof of high level of indigenisation and local vendor development.Growing economy and per capita income will eventually increase the demand for automobiles which is set to cross the 500,000 units by 2022, he anticipated.

Local industry is also gearing up to meet the growing demand with both existing and up to six new players investing heavily to meet the growing demand, he said.

He said IMC had been fighting the menace of premiums and cancelled multiple booking orders on Thursday, which was the second after December 2017. For checking investors’ activity numerous orders had been cancelled after scrutiny. He asked the government to increase transfer taxes to discourage premiums.

Aamir Allawala, former PAAPAM chairman, said most of the vendors are not only increasing capacities but are also upgrading technologies. Some new entrants have also announced investment plans. The addition of a European and two Korean brands would add variety in the car section and create healthy competition, he added.

Optimistic macroeconomic indicators, coupled with breakthrough projects like CPEC can help Pakistan to make it to the league of top 10 automobile manufacturers in the world.

Published in Dawn, March 17th, 2018