KARACHI: Pak Suzki Motor Company (PSMC) and Indus Motor Company (IMC) seem unable to justify recent increase in prices of their cars as they did not explain the reasons behind the move to Engineering Development Board (EDB) despite many letters and reminders.
‘EDB has sent letters and reminders to both the auto assemblers asking them to furnish the reasons behind the recent price hike. But both the companies have not responded yet’, Chief Executive Officer (CEO) of EDB, Tariq Ejaz Chaudhary told Daily Times.
The government took a strong notice of the hike in car prices as Federal Minister for Industries and Production (MoI&P), Ghulam Murtaza Khan Jatoi had ordered an investigation into an increase in prices of cars by the local assemblers.
The Minister directed the EDB to investigate the reasons behind this increase and submit a report within a week. In compliance with the said orders, EDB sent communiqué to both the auto assemblers asking them to provide justification for price increase.
EDB is waiting for legitimate reasons, he added.
‘The government has not introduced any new taxes, so there is no apparent reason behind this unfair price hike,’ said Chaudhary, adding that if these local assemblers fail to justify the price hike a necessary action will be taken against them then.
‘They will have to revise the price increase or may be forced to pay back additional amount to customers,’ said the CEO.
He was of the view that instead of increasing prices frequently, local assemblers should pass on the benefits (being taken from the government in terms of different incentives and relaxations in duties/taxes structures) to the end consumers.
The EDB had already communicated through separate letters with the executives of those auto assemblers and cleared that the Yen had led to a price hike of local cars when it was on the rise, but there has been no cut in price following a sharp decline in the currency.
It should be noted that PSMC, Pakistan’s top car assembler by market share, has increased prices by 3 percent i.e. Rs 20,000 to Rs 30,000 with effect from August 1, 2016.
In March this year, IMC, the distributor of Toyota Cars in Pakistan, had increased the prices of Toyota Corolla cars by Rs 20000 to Rs 65000 in account of addition of some new features.
This was the second time IMC had increased Toyota Corolla prices within a short span of time of six months.
The 27 year old variant, Suzuki Mehran’s price was increased from Rs 630,000 to Rs 650,000. Similarly, the top of the line Suzuki Swift AT NV now costs staggering Rs1, 511,000.
The price of Suzuki Cultus Petrol and Suzuki Cultus CNG increased
from Rs 1,094,000 and Rs1, 169,000 to Rs1, 124,000 and Rs1, 199,000 respectively.
Industry sources believe that the PSMC has increased vehicles’ price just to offset the impact of falling profitability after ending of Green Taxi Scheme of Punjab Government.