Pak Suzuki raises price for the fourth time

Prices of PSMC cars have increased up to Rs235,000, will come into effect from April 6

KARACHI:

Pak Suzuki Motor Company (PSMC) has raised the prices of its cars for the fourth time this year, with the highest increase being Rs 235,000. The new prices will come into effect from April 6, 2023.

The cumulative hike in vehicle rates in 2023 alone is up to Rs 1.203 million. The auto sector is already experiencing a decline in sales, with a 20-25% drop being reported in recent months, which auto experts attribute to high prices and political instability. The prices are making it unaffordable for the middle-income class and lower-middle-income-class citizens to purchase cars. The rise in interest rates has made car leasing at 24-25% interest rates a challenging prospect, too.

Auto expert Mashood Ali Khan said, “The primary reason for this decline is the steep increase in prices. Moreover, the lack of flexibility in bank financing is also contributing to the problem. Even if car financing becomes more accessible, the issue of importing remains unresolved.”

“The unstable political situation in the country has further exacerbated the situation, leading to a decrease in demand and lack of confidence building,” said Khan.

“The price increase is likely due to the recent depreciation of the Pak rupee against the USD,” said auto sector analyst Arsalan Hanif.

Last month, Pak Suzuki managed to sell 978 units in Feb’23 due to low demand and reduction in purchasing power parity. “We expect a continuous increase in car prices will keep sales volumes in the range of 2,500-3,500 units per month,” added Hanif.

With each price hike, the auto sector is witnessing a decline in sales. The price hike has also led to a surge in the price of old cars in Pakistan.

H M Shahzad, a dealer of second-hand cars, said, “Unprecedented price hikes in new cars have led to a surge in the price of old cars in Pakistan as well. The price of old cars priced at Rs1,500,000 have now hit Rs1,800,000.”

The Suzuki Alto, Suzuki Wagon R, Suzuki Cultus, Suzuki Swift, Suzuki Ravi, and Suzuki Bolan have all been affected by the price increase.

The Alto VX, VXR, VXR AGS, and Alto AGS have increased their prices by Rs 107,000, Rs 125,000, Rs 134,000, and Rs 140,000, respectively.

The Wagon R VXR and VXL have both increased their prices by Rs 152,000 and Rs 164,000, respectively. The Wagon R AGS’s price has gone up by Rs 178,000.

The Cultus VXR has increased its price by Rs 178,000, the VXL by Rs 195,000, and the AGS by Rs 209,000.

The Swift GL MT, GL CVT, and GLX CVT have all increased their prices by Rs 204,000, Rs 219,000, and Rs 235,000, respectively.

The Suzuki Ravi has increased its price by Rs 88,000, and the Suzuki Bolan has increased its price by Rs 92,000.

The drop in regulatory duty on used imported cars, however, may provide a solution for both parties. The SRO of additional customs duties on used cars expired on March 31, 2023, which means there is now no RD on used cars in Pakistan. Resultantly, the market for 660cc cars is expected to see a significant surge, as customers can now save between Rs600,000 to Rs800,000 on their purchases.

“Unfortunately, the rise in car prices has left the old car market in a state of limbo,” said Muhammad Sabir Shaikh, an auto expert.

Published in The Express Tribune, April 6^th, 2023.

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