In Pakistan, Honda increases car prices to improve profit margins

Pakistan's auto industry on bumpy ride due to depreciation of rupee against US dollar and a high interest rate

KARACHI: Taking advantage of seasonality, Honda Atlas Cars Pakistan has increased its vehicle prices in the range of Rs20,000 to Rs100,000 in order to offset the decrease in profit margins.

The Japanese automaker increased the price of BR-V MT by Rs100,000 to Rs2.999 million from Rs2.899 million, according to a company notice sent to its dealers.

The second biggest price hike was made in Civic Turbo. The car became costlier by Rs80,000 to Rs4.479 million from Rs4.399 million.

The company jacked up the price of BR-V CVT by Rs50,000 to Rs3.149 million from Rs3.099 million. The price of BR-V S CVT was also raised by Rs50,000 to Rs3.299 million from Rs3.249 million.

It increased the price of 1.8L VTI SR CVT by Rs30,000 from Rs3.749 million to Rs3.779 million. The price of 1.8L VTI CVT rose by Rs50,000 to Rs3.549 million from Rs3.499 million.

The price of 1.3L MT went up by Rs20,000 to Rs2.329 million from Rs2.309 million whereas 1.3L AT became expensive by Rs20,000 to Rs2.509 million from Rs2.489 million.

The price of 1.5L MT was raised by Rs20,000 to Rs2.389 million from Rs2.369 million and 1.5L AT also got costlier by Rs20,000 to Rs2.559 million from Rs2.539 million.

Similarly, 1.5L Aspire MT will now cost Rs2.559 million, up Rs20,000 from Rs2.539 million, while 1.5L Aspire AT will be sold at Rs2.719 million, also up Rs20,000 from Rs2.699 million.

Honda Atlas has followed in the footsteps of its counterparts – Pak Suzuki Motor Company and Indus Motor – in an apparent bid to take advantage of seasonality to improve its profit margins, according to an industry source.

In November 2019, the auto sector recorded a decline of 44% in sales that stood at 9,789 units compared to 17,442 units in the same month of previous year.

Honda Atlas was the major loser among the three Japanese automakers in Pakistan as its sales plunged 62% to 1,303 units in November.

The auto industry had been on a bumpy ride in 2019 due to depreciation of the rupee against the US dollar and a high interest rate. Automakers increased prices more than once but the current price hike seems to be an attempt to take advantage of seasonality as many consumers wait for the new year to purchase new vehicles.