Business

Toyota raises car prices by up to Rs350,000 from Jan 2019

Decision comes after 7% devaluation of rupee against US dollar

Bilal Hussain October 17, 2018

PHOTO: AFP

KARACHI: Indus Motor Company (IMC), which had recently stopped car bookings, has made a massive increase in vehicle prices following the recent round of rupee depreciation.

The company has raised prices in the range of Rs50,000 to Rs175,000 for November and December deliveries and Rs100,000 to Rs350,000 for deliveries from January 2019 onwards.

Indus Motor announced that it would be absorbing 100% impact in the case of vehicles for which full payment had been made and deliveries were scheduled for October and November.

The company will also bear 50% of the price increase for deliveries tentatively scheduled for November and December.

"It is extremely difficult for IMC to hold current retail selling prices and therefore, we are compelled to pass on part of this impact to the market," the company said.

Honda Pakistan increases car prices by up to Rs100,000

The rupee's depreciation of over 26% against the US dollar in the past 10 months has left a devastating impact on many businesses, particularly the ones that rely heavily on imports.

Toyota has increased Corolla XLI price by Rs50,000 and the price will rise another Rs50,000 in January. First, its cost will rise to Rs1.994 million and then cross the two-million mark with a tag of Rs2.044 million in January.

Prices of other Corolla variants have been raised in the range of Rs50,000 to Rs100,000, which will double in January.

IMV-4 4X4 has become expensive by Rs175,000 with a price of Rs6.624 million while its cost will increase to Rs6.799 million in January.

Indus Motor jacks up car prices for third time this year

Other variants of the model have also faced a price hike of between Rs125,000 and Rs150,000, which will double in January.

"We have devised this price strategy to give relief to customers. We are actually absorbing the impact (of rupee devaluation)," IMC CEO Ali Asghar Jamali told The Express Tribune.

JS Research analyst Ahmed Lakhani said the price hike in two phases would result in increase in sales of the company in the short run as people would buy early because prices would go up again in a few months. He added that he expected other auto companies to increase car prices as well.

This is the fourth time this year Indus Motor has increased car prices following the rupee depreciation, which began in December 2017. Suzuki has already raised prices four times and is expected to increase prices again following the 7% rupee depreciation. Honda has so far increased car prices three times.

COMMENTS (6)

Ali | 5 years ago | Reply If these companies have localised production as they claim, which is the reason why imports of vehicles are heavily taxed to protect them, then why such large price rises? If all they do is stitch seat covers and assemble cars then this protection they receive is not justified. We should open up the car industry to imports and competition because as things stand they are not adding to the economy.

Asif Rashid, ACA FCCA | 5 years ago | Reply First time, price increase will be implemented in phases. Let us hope that today's announcement of price increase if final for Jan 2019 and IMC does not again revise prices before Jan 2019. The Govt and CCP should at least keep some check and balance on existing automobile companies prices also. If new entrants (of autos as per Auto Policy) are allowed waiver/subsidies in Reg duty and custom duty, then why not the existing automobile companies? Opening ways for new entrants doesnt necessary means closing gates for existing one. However, ideal rule should be that once booking (or partial/half) payment is made, price increase should not have impact; but this isnt the case which is not justified. Investors/dealers who booked cars at previous prices (delivery in Oct/Nov) or have cars in hoarding, have raised their prices. All have benefited from the increase. WOW!! Genuine buyer suffers. Who cares ????? Waiting for announcements from Honda & Suzuki !!