Car Deliveries are Slowly Getting Back to Speed in Pakistan

Engineering Development Board (EDB) officials have stated that car deliveries are gradually getting better. They revealed this during the Senate Standing Committee’s (SSC) meeting today.

EDB representatives claimed that the automakers are obliged to pay KIBOR + 3% to customers if the lead times of their cars go beyond 60 days. So far, carmakers have paid around Rs. 2 billion to customers due to late deliveries, EDB officials stated.

Conversely, SSC members stated that carmakers are collecting the full amount at the time of booking and quoting delivery times of 5 to 8 months. Normally, the actual delivery date goes beyond the delivery times quoted by the companies.

EDB has assured the committee members that car companies are picking up pace in terms of their production operations by coping with the ongoing supply chain issues and import restrictions.

SSC members also expressed their concerns regarding the rising car prices. According to a briefing from the Engineering Development Board (EDB), the reasons for rising car prices are as follows:

  • Rupee-Dollar disparity
  • Freight costs
  • Input material costs in the local and international markets
  • Cost of business
  • Import restrictions

Interestingly, EDB also pinned the blame on “improvements in vehicle models” for the price hikes. It bears mentioning that the improvements are only in a select number of high-end car models.

The economy cars still only have the basic features including two airbags, an infotainment system, ABS brakes, AC, stereo, etc. A price increase of 20-30% doesn’t seem justified against such minor “improvements”.

EDB’s briefing about car prices also suggests that more price hikes are ahead.

Published by
Waleed Shah