The Pak Suzuki Motor Company (PSMC) on Wednesday increased its car prices for the fourth time in 2023, with the hike reaching up to Rs235,000. The new prices will be effective from April 6, 2023. This year alone, the company has raised vehicle rates by up to Rs1.203 million.
The auto industry in Pakistan, much like the overall economy, is experiencing tumultuous times due to the rapid depreciation of the rupee and Letter of Credit (LC) issues. Pak Suzuki’s sales dropped 92% year-on-year to just 978 units in February 2023. The company’s latest price increase reflects the impact of supply chain issues and rising vehicle prices.
Other automakers and motorcycle makers have also increased their prices multiple times due to economic difficulties and import restrictions. Honda Atlas Cars and Indus Motor Company (IMC) have also increased their prices. Due to inventory shortages, Pak Suzuki has extended the shutdown of its motorcycle plant until April 15 and suspended automobile plant operations from April 7 to April 14.
The auto industry in Pakistan has been struggling with numerous challenges, including supply chain disruptions and rising prices, for the past few years. The depreciation of the rupee has led to an increase in the cost of imported auto parts and raw materials, which has forced automakers to raise their prices. Additionally, Letter of Credit (LC) issues have made it difficult for companies to import necessary components, leading to production delays and a shortage of inventory.
The impact of these challenges can be seen in Pak Suzuki’s sales figures. The company has traditionally catered to the entry-level segment, but its sales have plummeted in recent months. In February 2023, the company sold just 978 units, a 92% drop from the previous year. The sales of its two most popular models, the 1,000cc Cultus and 660cc Alto, also fell sharply.
Other automakers in Pakistan are facing similar challenges. Honda Atlas Cars and Indus Motor Company (IMC) have also raised their prices multiple times this year. The price of Honda’s high-end Civic variant crossed the Rs10 million mark for the first time in history in March. IMC has raised its prices by up to Rs2.017 million, and the new rates came into effect from March 10. The government’s import restrictions have further exacerbated the auto industry’s problems. Central bank foreign exchange reserves have dropped to a level that barely covers four weeks of imports, leading to the imposition of import restrictions. Automakers have been forced to halt production due to a shortage of necessary components, leading to inventory shortages and further price increases.
