Car prices in Pakistan Coming Down amid plant shutdowns

News Desk8 months ago

In response to the recent appreciation of the Pakistani rupee, Indus Motor Company Ltd (IMC) has reduced car prices by Rs100,000 to Rs1.310 million. On the other hand, Pak Suzuki Motor Company Ltd (PSMCL) has announced a temporary suspension of car and motorbike production.

In an official stock filing, PSMCL stated that their car manufacturing plant would be closed from October 25-27 and October 30-November 3. Additionally, the two-wheeler assembly will also be non-operational from November 1-3 due to inventory shortages.

According to financial experts at Topline Securities, Pak Suzuki reported a profit of Rs3.8 billion (earnings per share of Rs46.24) in the third quarter of 2023, a significant improvement compared to a loss of Rs2.5 billion (loss per share of Rs30.25) in the same period in 2022. However, the company’s cumulative loss for the first nine months of 2023 stands at Rs5.9 billion (LPS: Rs71.34) compared to a loss of Rs2.5 billion (LPS: Rs30.46) in the same period last year.

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During the July-September quarter, sales reached Rs29.9 billion, a marginal increase from Rs29.8 billion in the same period the previous year. However, overall sales for the first nine months of the current calendar year dropped to Rs73 billion, a significant decline from Rs142 billion in the same period in the previous year.

Indus Motor, in response to low inventory and parts shortages, had already temporarily closed its plant from October 17 to November 17. During this time, they reduced the prices of their Toyota Yaris models by Rs100,000 to Rs120,000.

The updated prices for various Toyota models are as follows:

  • Toyota Yaris models now range from Rs4.399 million to Rs5.849 million.
  • Toyota Fortuner models are priced between Rs14.499 million and Rs19.999 million.
  • Toyota Corolla models are available from Rs5.969 million to Rs7.549 million.
  • Toyota Revo models range from Rs11.959 million to Rs15.359 million after a price reduction of Rs450,000 to Rs790,000.

Indus Motor Company is the third automaker to pass on the benefits of a stronger rupee to its customers. Lucky Motor Corporation and MG Motors had previously lowered their prices by varying amounts.

It’s worth noting that while these automakers had swiftly increased their prices in response to rupee depreciation against the US dollar, they have been relatively slow in reducing prices despite the rupee gaining 9% in value against the dollar since September 5, with the exchange rate now standing at Rs279.43.

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Interestingly, motorcycle assemblers have not followed suit by reducing their prices, despite raising them multiple times in a single month due to rupee depreciation.

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