Suzuki welcomes new-year with price hike

KARACHI: Following rupee devaluation last month, Pak Suzuki, after Toyota Indus, has also increased prices of its cars by up to Rs 20,000.

Pakistan’s auto industry is heavily dependent on imports of auto parts and completely knocked-down (CKD) kits, which constitute around 30 per cent to 50 per cent of their raw material cost.

According to a JS investments report, Pak Suzuki Motor Company (PSMC) has raised prices of its cars by Rs 10,000 and Rs 20,000. Prices for Bolan and Ravi pickup vans have been increased by Rs 10,000, Mehran VX and VXR by Rs 10,000 (CNG variants prices unchanged), meanwhile prices of Wagon-R VXR and VXL have been hiked by Rs 20,000.

However, the move was widely anticipated due to the recent rupee devaluation against the US dollar, which would push up costs of raw materials for auto assemblers.

“We believe the price increase will enable PSMC to pass on the impact of rising costs on to the end consumers without any significant dent to volumes, given current high demand,” the report added.

Insight Securities Financial Analyst Zeeshan Afzal said that the auto manufacturers will have to raise their prices in order to remain profitable.