KARACHI: Indus Motor Company, the makers of Toyota cars, has raised vehicle prices by up to Rs307,000 in a bid to recuperate its contracting margins due to constant depreciation of the rupee against the US dollar.
Indus Motor CEO Ali Asghar Jamali told The Express Tribune “other players have already increased prices, but we waited a while for improvement in the situation. However, we had to resort to price increase as the situation did not change.” He said the price hike would not apply to the already booked orders.
For orders at new prices, the company has increased its warranty. A notice issued by the company stated, “IMC is pleased to extend its two-year warranty or 50,000 kilometres to three-year warranty or 100,000 kilometres for all CKD and CBU products. This warranty is applicable to all new orders effective from April 20, 2019.”
Prices of Corolla XLI and GLI variants went up by Rs65,000 to Rs2.11 million and Rs2.36 million respectively. Meanwhile, Altis 1.6 became costlier by Rs100,000, going up to Rs2.67 million. The maximum increase in this model was made in the price of Grande CVT, which jumped from Rs3.30 million to Rs3.41 million.
On the other hand, the price tag of IMV variant Fortuner 4×4 Diesel was raised by Rs307,100 to Rs7.82 million, while the price of Fortuner 4×2 Petrol Hi went up from Rs7.04 million to Rs7.30 million.
Another IMV variant, Revo G MT, became expensive by Rs150,000 to a new tag of Rs5.01 million.
“This is the third time in the current year when the company has increased prices,” said All Pakistan Motor Dealers Association Chairman HM Shahzad.
“With the speed at which dollar has soared, the vehicle prices should be much higher,” said the CEO. “Nobody can work on loss.”
“Prices are still lower compared to the rupee devaluation just because of localisation,” said Jamali. However, “we have to pass on the cost to customers as most of the raw material is imported, therefore, sometimes even localisation cannot prevent the price hike,” he elaborated.
According to an industry expert, overall orders in the auto sector have gone down significantly.
JS Research analyst said Indus Motor had recently expanded its production capacity from 55,000 units per annum to 65,000 units and it would make another expansion of 10,000 vehicles in fiscal year 2021.
To utilise the increased capacity, the company could introduce new models, which would be less costly than the existing ones, he said. For example, the company does not have any car priced between Rs1.5 million and Rs2 million, so the market expected Indus Motor to introduce some model in this range.
Published in The Express Tribune, April 20th, 2019.