KARACHI: The rupee depreciation has taken its toll on the automobile industry as Toyota has increased its cars prices up to Rs 60,000 and it is expected that other players – Suzuki and Honda— will follow the suit soon.
Pak Suzuki Motor Company spokesperson told Pakistan Today that the new adjusted price to rupee devaluation has not been discussed so far at the company; however, currency devaluation was certainly having a negative impact at the cost of cars.
Toyota has increased prices of its flagship Corolla variants XLI, GLI and GLI (Automatic) by Rs 60,000, whereas the price of Corolla Altis 1.6 has been increased by Rs 50,000.
The rupee has depreciated by 5.2 per cent since December 8 against US dollar; Pakistan’s auto industry is heavily dependent on imports of auto parts and completely knocked-down (CKD) kits, which constitute around 30 to 50 per cent of their raw material cost. Toyota has increased prices around 3.4 per cent.
The depreciation in the value of rupee has resulted in stock price correction of HCAR, PSMC and INDU by 5.9pc, 5.9pc, and 3.4pc.
According to a financial analyst at Insight Securities, Zeeshan Afzal, prices of all cars will jack up, including imported used cars, as the cost has increased following rupee devaluation.
“The net profits of automakers are around 5-7 per cent. The rupee has been depreciated by the same margin. So if an automotive company doesn’t raise its prices then it won’t accrue any profit from sales. So every player in the automobile industry will increase the prices of their cars,” Afzal commented.