Analysts cited the appreciation of the yen against rupee and the increase in prices of raw materials for manufacturing parts as the reasons for this price increase. The yen has appreciated by eight per cent against rupee since February this year.
“The appreciation of the yen against rupee will affect the entire automobile sector and other anciliary companies will follow suit in raising their prices,” said Furqan Punjani, an analyst at Topline Securities.
He added that companies which are more localised in their production processes will delay price increases but the increase itself is inevitable. However, the price increase should not affect the sales of Toyota cars for now since “those who buy a Toyota will not be deterred by the price increase,” said Punjani.
The company had not increased the price of its cars till now in spite of the constant yen appreciation, the press release said, adding that the automobile industry is struggling in Pakistan and the floods only added to its woes by restricting demand.
The press release informed that those customers who booked their purchases before this announcement will pay the previous price and the company will absorb that loss.
Published in The Express Tribune, September 16th, 2010.
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