Yesterday, Engineering Development Board (EDB) held a meeting with the heads of various local automakers to discuss the recent price hikes.
The attendees included CEOs of Toyota IMC, HCAR, LMC, Pak Suzuki Motor Company (PSMC), Al-Haj Automotive, United Motors, Regal Automobile Industries, Master Changan Motors, Hyundai Nishat Motors, Sazgar Engineering Works, as well as the representatives of EDB and MoIP.
According to our sources, MoIP raised serious objections regarding car manufacturers not providing their respective cost structures. It argued that the rate of price hikes is much greater than that of the US Dollar (USD) value hike against the Pakistani Rupee (PKR).
In an official notification, EDB had told the companies to share their respective cost structures and valid reasons for price hikes. Out of eleven automakers, only a few shared their details, while others failed to do so.
Automakers were adamant that they have no choice but to increase the prices of their cars due to rising raw material costs, shipment costs, and devaluation of local currency. A Pak Suzuki Motor Company (PSMC) representative claimed that the increase in production costs has reduced the company’s operating profit.
Representatives of other companies stated that the increased freight charges in the global market have also contributed to price hikes. They highlighted that a freight container that previously cost $3,000, now costs $6,000.
Car company representatives added that the turbulent political situation has also hurt the economy and car industry operations. They added that their respective per-unit costs have increased massively over the last month. Automakers have increased investment in the sector but are not getting returns accordingly, representatives claimed.
Conclusively, MoIP directed the remaining carmakers to submit their respective cost structures within two days. It announced that another follow-up meeting in this regard will be held soon.