KARACHI, March 5: Consumers are unlikely to see any price cut in new car models despite frequent statements and assurances by Industries Minister Liaquat Ali Jatoi in the last one month in various business forums and National Assembly session that the assemblers would cut prices.
Local assemblers have so far not responded to the call of industries minister and chances are slim that manufacturers would announce any price cut when demand has outstripped supplies and buyers are in a hurry to purchase new models in shortest possible time.
Officials in leading assembly plants and even their authorized dealers are not ready to offer any comments as to when prices would come down or if there is any chance of price cut in future.
Chairman Pakistan Automotive Manufacturers Association (PAMA), Kunwar Idris has also ruled out any possibility of price cut in near future.
He told Dawn on Wednesday that the assemblers have not increased the prices since the last two years despite negative impact of rising yen value against the rupee.
“The yen has gained its strength against the rupee by eight per cent in the last 18 months, thus making adverse impact on the industry,” he said, adding that the assemblers have kept the prices intact.
Even many assemblers have rolled out new car models without increasing their prices. Keeping in view these developments there seems no chance of any price cut.
He portrayed a rosy picture for the car industry in view of higher sales and production in coming months since the auto leasing and financing facilities are expected to become more attractive in future followed by persistent arrival of home remittances from abroad.
Kunwar Idris, however, clearly said that “the industries minister has not approached him for any price cut. May be the minister has individually been urging the local assemblers to cut prices but not contacted me at the PAMA level”.
He said that PAMA members had discussed various issues with the Governor State Bank of Pakistan (SBP), Dr Ishrat Husain, in an informal meeting on Wednesday.
Issues like higher production and sales, cheaper leasing and finance facilities, higher localization and impact of WTO on car industry were discussed except any discussion on price issue.
Meanwhile, some market analysts offer different views on price cut in cars. They said that assemblers may not slash prices at this time when cars are selling as hot commodities. They said that actually the industries minister is asking the assemblers in a humble tone to reduce prices instead of being aggressive or sounding any warning of adverse action in case of non-compliance.
In case assemblers announce any price cut under some pressure from the government — it will hardly make any difference as the premium, currently being charged on new models, will go up further.
Delay in delivery of cars by four to six months from the booking date and the issue of premium still linger on despite every effort by the assemblers and the government to check and control it.
A premium of Rs30,000 is being charged on Mehran CNG 800cc and authorized dealers are quoting delivery time of July in case it is booked now. Cultus will be delivered in four months time and dealers are charging Rs18,000-20,000 as premium on ready stocks. A buyer will get the delivery of Alto 1000cc in one or two months and dealers are charging Rs12,000-15,000 as premium.
One of the authorized dealers of Honda said that the prosmatec oriel Honda will be delivered in December if it is booked right now while its manual transmission will be delivered in July- August. The delivery time of City is August. Its authorized dealer claimed that there is no premium on all Honda models.
Toyota Corolla is still in high demand and selling as the hot cake with a premium ranging between Rs100,000-150,000.
