For the third year in a row, car prices in Pakistan continued to witness a massive surge in 2020. Although automakers have always blamed depreciating currency value as the reason behind each price increase, year 2020 proved it wasn’t really the case though. The indication of price increase was made by us on the 17th of December 2019, which turned out to be 100% correct.
Year 2020 kicked off with Pak Rupee standing at Rs 154+/- against the US Dollar in January, which stayed there till the 8th of March, after which the massive depreciation occurred pushing the value of Rupee down to Rs 168+/- against the greenback. The up & down roller coaster trend continued till the 27th of August after which Rupee started to regain its strength reaching 7-month high of Rs 158.62 against US dollar in the interbank market in November while becoming the 3rd best-performing currency in Asia.
Today the PKR stands at Rs 159+/- against the Dollar but despite this improvement, the prices of local assembled cars are being constantly increased which negates their dependency on US Dollar to a greater extent. Let’s do a rundown about the increase in car prices made throughout this year.
The first price hike was announced in December 2019 by Pak Suzuki to be effective from the 1st of January 2020. The price increase was from Rs 49,000 to up to Rs 90,000 depending on the model. This was followed by Indus Motor Company (IMC) which announced a price revision on 31st of December to take effect from New Year. On the 8th of January, Honda Atlas followed the footprints by announcing a massive price increase of up to Rs 100,000 to be effective from the 16th of January 2020. Then on the 30th of January, Pak Suzuki announced to increase the price of Cultus VXL & AGS.
After a silence in February & March, another prediction was made about an expected increase in car prices which too, proved out to be true. Bear in mind the country as well as auto industry had went into COVID-19 lockdowns from the 22nd of March with production & sales at a complete halt. On the 14th of April, IMC announced a massive increase of up to Rs 500,000 on its entire range including the newly introduced Yaris as well as the IMVs.
Following this, Honda Atlas announced their second price revision of the year within just 4 months. This time the prices were increased by up to Rs 120,000. Towards the end of May, Isuzu D-MAX prices were revised for V-Cross variants in the name of minor model enhancements. The manual D-MAX V-Cross was increased by Rs 100,000 whereas the automatic version was increased by Rs 200,000.
In July the 4×4 buyers saw the prices of Isuzu D-Max and Toyota Hilux 4×4 variants go up due to additional duties imposed in the budget. According to government, these vehicles were originally intended for commercial purposes but were largely used as status symbol in the country because of which the 7.5% FED (Federal Excise Duty) was imposed.
Although the FED was imposed on double cabin 4x4s only, prices of other passenger cars were continued to be pushed up. IMC announced their 3rd price increase for the year 2020, this time it was for its CBU imported vehicles with increase ranging from PKR 3.8 lac to up to PKR 48.7 lac on different products. Pak Suzuki too, increased the price of the base VX version of Alto by Rs 63,000.
United also made the price increase of the year with Rs 2.14 lac bump to their Bravo hatchback. Lastly on the 30th July, Honda Atlas made their 3rd price hike of the year with an increase of up to Rs 100,000 to take effect from the 10th of August 2020.
Again in August we witnessed multiple price increase announcements. Ghandhara pushed the prices of Isuzu D-Max further up followed by Pak Suzuki which increased the prices of Ravi & Bolan by Rs 35,000. Then, Hyundai-Nishat which introduced the Tucson crossover SUV on the 12th of August announced a Rs 200,000 price bump on the very next day– the 13th of August however most interestingly according to company notification the price revision was effective from the launch date, that is the 12th of August 2020.
The trend continued in September with Al-Haj increasing the prices of FAW passenger cars followed by Kia-Lucky which raised the price of Picanto automatic by Rs 50,000. Pak Suzuki wasn’t the ones to be left behind as they announced yet another price revision this time increasing the prices of Cultus by Rs 45,000 while giving Rs 500,000 & Rs 1 million push to imported Jimny & Vitara respectively.
Moving on to October, IMC once again announced a price increase– their 4th for the year however this increase affected Toyota Yaris variants only. On 14th October Pak Suzuki also increased prices of most of its models by up to Rs 42,000.
Come December and we have just witnessed Pak Suzuki giving yet another push to Cultus & Swift by up to Rs 100,000, whereas IMC is in process of introducing a minor model change for Toyota Corolla that will see the prices go by up to Rs 100,000 to be effective from January 2021.
During this year other automakers including Changan also silently kept increasing the prices of their products. For example the Karvaan MPV which was priced at PKR 12.99 lac late last year is now available for PKR 14.35 lac after multiple revisions during the year 2020. Similarly DFSK Glory was priced at PKR 35.0 lac for 1.5T MT, PKR 37.5 lac for 1.5T AT and PKR 39.0 lac for 1.8L CVT in January 2020 whereas by December they are priced at PKR 37.5 lac, PKR 40.0 lac and PKR 41.5 lac respectively, & so was the case with their other products. The only exception was United Motors which having made Rs 214,000 increase in July reduced the price of Bravo by Rs 100,000 in October 2020.
To sum it up, year 2020 have witnessed drastic slowdown in sales in the first half of the year particularly due to COVID-19 lockdowns with sales at a complete halt in Q2, coupled with depreciating currency value which resulted in a massive increase in car prices. However towards the latter half of the year the currency regained its value to reach nearly where it was placed at the beginning of the year however car prices instead of being brought back are being constantly pushed up which is seen as a move just to dampen the declining profits. There is hardly 3.2% depreciation in currency if we compare the value of PKR from January 2020 with that of December 2020 against the USD, however the difference in car prices is much higher than this, with automakers revising the prices for nearly 4 or more times during this year.