Prices are likely to rise across the automotive industry board.
Pakistan's economy is going through an unprecedented period - and its impact is being felt throughout the business sector. The sharp fall in the value of the US dollar against the Pakistani rupee over the past two months has led to a significant increase in the cost structure of import-dependent industries. The automotive sector imports its CKD kits and that is why the devaluation has hit the industry hard. This has forced major automotive players to reconsider pricing
Apart from Proton Pakistan, some major OEMs have already increased their prices before Eid. However, the Pakistani rupee has depreciated by more than 20% against the US dollar over the past two month
As a result, Proton is the first OEM to come up with its revised prices, but only 11%, which is far less than the actual effect. This is a welcome step and we hope that other OEMs who are expected to increase their prices in the coming weeks will follow suit without shifting the entire burden of cost overruns to consumer
The price increase will apply to all vehicle classes including hatchbacks, sedans and SUVs. Due to its high cost, the crossover SUV category will be most affected. Due to the depreciation of our currency against the US dollar, Korean SUVs can add up to 7.0 million Pakistani rupees
This price increase will hit both consumers and the industry hard, which could affect demand and we can only hope that the economic situation will return to normal and stability will be restored, which will help to heal business sentiments. It is necessary
Currently, OEMs are not allowed to open LCs for importing CKD kits. However, the ban is likely to be lifted after the resumption of the IMF program. As a result, if the PKR gains continue against the USD, car prices could stabilize.