Another domino effect of price hikes is imminent, following the first move from Kia Pakistan and Toyota Indus Motor Company (IMC). According to industry analysts, the price hikes will range up to 15 percent.
Research analyst at Ismail Iqbal Securities, Muqeet Naeem told the media that Honda will only increase the prices of City and BR-V since it just launched the new Civic having considered the market situation beforehand.
He added that Suzuki will only increase its car prices marginally due to a recent massive increase in November last year. Naeem further foresaw that Hyundai will also announce a price hike due to mounting cost pressures.
Chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Mashood Khan echoed the same concerns and stated:
When one Original Equipment Manufacturer (OEM) increases car prices, others follow too. It is because all of the companies are facing similar cost pressures such as rupee depreciation against dollar, increase in the prices of imported raw materials such as steel.
He added that these price hikes, along with State Bank of Pakistan’s (SBP’s) sanctions on car financing will cause the demand to shrink. Contrarily, Chairman of All Pakistan Motor Dealers Association (APMDA) HM Shehzad said that the car demand will continue to rise while the delivery time will lengthen further despite the price surge.
Market sources agreed with the latter, adding that the car prices always climb around the time of the national election, with sales remaining unaffected.
The advent of new vehicles has also sparked the interest of many buyers, who now prefer brand new cars instead of used ones. Based on that, Shehzad’s opinion makes more sense.