Car prices ratchet up by average 10pc in March
KARACHI: Automakers cranked up car prices by average 10 percent in March, citing cost pressures, caused by free falling rupee, surging freights, and rising prices of imported raw materials such as steel.
“Almost all companies have jacked prices,” said JS Global Research Analyst Wasil Zaman. “On an average, car prices have gone up by 9-10 percent. The reason is rupee devaluation, increased freight charges and rising raw material cost.”
Zaman added that the car prices might still not be stable because of exchange rates volatility and expensive raw materials.
“The price hike of City 1.2M/T by 14.7 percent touched the upper end of the spectrum, while the Sportage AWD price increase of 3.7 percent settled at the other end of the spectrum,” said Muqeet Naeem of IIS Research.
All major auto companies such as Suzuki, Toyota, and Honda increased car prices recently.
The price of newly-launched Civic was raised in a range of 4.5 and 6 percent, while Suzuki Swift’s price jumped by around 7.8 and 9.3 percent.
A comparison of current and post annual budget prices revealed the 1,000cc segment saw the biggest jump, where prices of Cultus, Wagon-R and Picanto surged in a range of 30-36 percent.
The lowest hike was seen in Crossover SUVs such as Sportage and Tucson, whose prices went up in the range of 14-17 percent.
This is the third time car companies have increased prices post annual budget FY2022.
“The first round of price hike struck in November last year, mostly because of the mounting cost pressures, the second hit in January when the government reversed the tax benefits given in the FY2022 budget, while the last was in March,” Naeem added.
“Looking at the currency devaluation, further price hikes cannot be ruled out. Continuous hikes coupled with higher interest rates and limitations on auto financing are likely to hurt auto demand in next fiscal year,” he added.
Meanwhile, bike companies such as Honda, Yamaha, and United Motors have also increased bike prices in March, citing similar reasons since both car and bike manufacturers have nearly the same input processes.