The government has decided to adhere to strict price control measures after the concurrent hike in price by numerous automakers. Earlier, the government took notice of the price hike, and a meeting under the chairmanship of Federal Secretary for Industries and Production, Jawad Malik, lodged an investigation into the matter.
The meeting was also attended by representatives of the automobile industry, Pakistan Association of Automotive Parts and Accessories Manufacturer (PAAPAM), Engineering Development Board (EDB), Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Competition Commission of Pakistan (CCP) and Ministry of Science & Technology.
The forum was apprised that the recent price hike was due to the depreciation of rupee against the dollar compounded with the increase in raw material and freight charges. Following this, the forum initiated an inquiry into the matter and ordered a private firm to conduct a forensic audit to review the validity of the claims made by the automobile industry representatives.
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After the initial inquiry made headway, the government has now instructed automakers to share their cost structure and the corresponding price hike. The companies were instructed to submit the cost structure before the 7th of May, and a follow-up meeting will be held today in the committee room of the Engineering Development Board.
The companies include; Toyota Indus, Honda Atlas, Pak Suzuki, Lucky Motors, Al-Haj Automotive (Proton), United Motors, Regal Automobile (Prince DFSK), Master Changan, Hyundai Nishat, Sazgar Engineering (Haval, BAIC).
Reacting to the government instructions, the CEO of Toyota Indus, Ali Asghar Jamali, refused to share the cost structure as he thought that “Cost structures are classified information,.” Ali Asad Hameed, CEO of Sazgar Engineering Works, underscored that it was becoming increasingly difficult to operate in Pakistan as he said that “It is extremely hard to plan anything in Pakistan currently.”
Last month KIA Lucky Motors notified a steep incline in the prices of its major sellers in Pakistan. Following the notification, the price of its flagship seller KIA Sportage was bumped up to Rs. 6,300,000. Additionally, in April, Pakistan Suzuki Motors Company Limited (PSMC) also increased car prices by up to 1.6mn for the second time in 2022. The company hiked the prices of six of its locally assembled models, including Suzuki Alto, Suzuki Wagon R, Suzuki Cultus, Suzuki Swift, Suzuki Bolan, Suzuki Ravi, and two imported CBU models, Suzuki Jimmy and Suzuki APV.