Another Increase in Car Prices Expected?

Cars in Pakistan might see another round of price hike as the transportation cost of containerized cargo across the world has increased by up to 700% due to an abnormal growth in imports following the reopening of global economies from lockdowns amid COVID-19 pandemic.

Recently, Master Changan Motors have revised the prices of their newly launched Alsvin sedan citing similar reasons behind the increase. However, since most cars assembled in Pakistan are largely dependent on imported kits & components, other automakers are also expected to follow suit.

Related: Changan Alsvin Prices Increased

Former Chairman of Pakistan International Freight Forwarders Association, Malik Moin while talking to The Express Tribune said:

“International freight charges have surged by up to 500-700% over the past couple of months. Freight charges for cargo in a 20-feet container arriving from China to Pakistan has increased to $2,000-3,000 compared to around $700 in June 2020 and before.”

The abnormal growth in demand for the containerized cargo sent international freight charges soaring. “Freight charges have surged crazily. I had not seen such a big jump in rates over the past 25-30 years throughout the world,” said Moin, who is also the CEO of Agility Pakistan. “Pakistan government is not responsible for the situation in international trade. Nor can it (alone) do anything to control it,” he added.

Related: Auto Sector Demands Car Scrappage Policy

Although analysts believe there is no short-term solution for the government at the moment, however in the longer run, it should increase the number of shipping companies in Pakistan.

According to the outgoing President of International Federation of Freight Forwarders Association Babar Badat, freight charges would stay at current levels and if they actually came down, they would not fall as low as they were during the pre-pandemic times. He also highlighted that many shipping companies had gone bankrupt around the world and most others had been operating in losses for about three to four years.

“The world had enjoyed trade at a low freight in the pre-pandemic days.”

The number of top international shipping companies has come down to three to four only as many companies were either acquired by others or merged to survive during the crisis.

Related: Rupee Recovers Against Dollar- Will Car Prices Come Down?

Although PKR has recovered to a 13-month high at Rs 156.7 against one US Dollar in inter-bank market, it is highly unlikely that car prices will come down in Pakistan due to one reason or another.

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