Pakistani carmakers have increased the prices by up to 47% in the past 9 months. The companies have attributed the hikes to the local currency depreciation, as well as the rise in shipping and raw material costs.
An Engineering Development Board (EDB) official shared a report with ProPakistani on car price trends in the country from January-September 2022.
Reasons Behind The Massive Price Hikes
EDB has rationalized the 47% increase in car prices over the last nine months by highlighting a few pertinent challenges. The Board said that the local currency depreciated by 31% during the said period. “The adverse parity of the rupee-dollar and hiked duties and taxes on the sector led to an increase in car prices in Pakistan”, EDB stated in the report.
The increase in freight rate is another key factor in the car price hikes in Pakistan. The freight rate has risen by more than 250 percent in a year. Raw material rate hikes are also a major factor in the increasing car prices.
The cost of production and logistics has gone up due to the high raw materials costs. EDB added that the import restrictions and tax rate hikes have also played a role in operational cost hikes.
Due to the policies implemented in May 2022, the automotive sector is operating at 35% of its total production capacity. This has resulted in the escalation of prices as well as a rise in fixed operational and technical costs.
