LAHORE: The price of a Toyota Landcruiser now equals the price of a 600 sq. yard house in DHA Islamabad, educating 307 students from KG to matric with TCF, or 800,000 meals at CHHIPA, it was learnt on Sunday.
In this regard, Chairman KASB Trade Ali Farid Khawaja pointed out how the rising prices of automobiles is a sign of hyperinflation.
Inflation has averaged 14.4% from January to June 2022 with inflation clocking in at 21.3% in June. Toyota Indus Motor Company (IMC), the company in question, has introduced four rounds of price increases in 2022. The latest of which came just this week.
He said that the current automotive renaissance may be a result of Pakistanis treating automobiles as an asset class to hedge against inflation. Khawaja’s comments are likely to be true on account of two reasons.
Profit has already extensively elaborated upon how cars are an asset class in Pakistan. Secondly, FY22 saw an automotive renaissance with the industry seeing growth. However, what is noteworthy are the segments within the automotive sector that grew. Cars, jeeps and SUVs saw a 55 per cent and 49pc increase, respectively. In contrast to this, both the three-wheeler and motorcycle segments contracted.
Such statistics are not just indicative of inequality but also of how Pakistanis may be rebalancing their personal asset portfolios. This is because FY22 is also categorised with a collapse of the rupee and double digit inflation.
Profit’s report earlier in the year on how on-premiums are being paid for popular automobiles which are also subject to enormous wait times is evidence on how people may have rebalanced their personal portfolios.
It is unlikely that car buyers are enamored with vehicles for the purpose of solely driving to this extent. Profit makes this claim because it reported how an automobile that did try to cater customers solely as a vehicle rather than an asset class was punished for doing so.