ISLAMABAD - A high-level meeting of monitoring committee for automobile industry on Thursday expressed concerns over massive price hike in past 5-6 sought factors and justification for recent price hike in different models of cars.
The monitoring committee for automobile industry, which met under the chairmanship of Federal Secretary for Industries & Production, has discussed the recent hike in prices of vehicles in the country. The committee has expressed concerns over massive price hike in past 5-6 months and safety features in automobiles. The forum sought factors and justification for recent price hike in different models of cars across the board.
The auto industry had increased prices of several models of its completely built-up (CBU) units following a jump in freight cost and international commodity prices. Prices have increased massively in three different phases. According to the report, first increase occurred in November owing to the spike in rates of cold-rolled coils, devaluation of Pakistani rupee and a rise in freight cost. The second increase was made in January 2022 on the back of imposition of federal excise duty (FED) and sales tax. The third wave of price hikes is mainly attributable to the increase in freight costs in March. According to the market sources, automobile companies are facing higher cost of production issue mainly due to the rupee depreciation against dollar and hike in prices of imported raw materials such as steel. They informed that auto sector is also facing a shortage of raw material.
Meanwhile, the monitoring committee for automobile industry was informed that recent price hike is due to dollar rate (USD to PKR), increase in freight charges and raw materials including operational cost. The industry also provided details on causes of late delivery, CDK imports and production capacity. After due deliberations, the chair directed to carry out forensic analysis of car prices in comparison with factors indicated by the industry as a reason for price change through independent professional expertise. Secretary instructed to complete the forensic analysis within two weeks. The chair also asked the automotive industry to provide localisation plan with time frame as well as safety features compliance report to the Ministry. Meeting was attended by representatives from automakers, 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 monitoring committee for automobile industry, which met under the chairmanship of Federal Secretary for Industries & Production, has discussed the recent hike in prices of vehicles in the country. The committee has expressed concerns over massive price hike in past 5-6 months and safety features in automobiles. The forum sought factors and justification for recent price hike in different models of cars across the board.
The auto industry had increased prices of several models of its completely built-up (CBU) units following a jump in freight cost and international commodity prices. Prices have increased massively in three different phases. According to the report, first increase occurred in November owing to the spike in rates of cold-rolled coils, devaluation of Pakistani rupee and a rise in freight cost. The second increase was made in January 2022 on the back of imposition of federal excise duty (FED) and sales tax. The third wave of price hikes is mainly attributable to the increase in freight costs in March. According to the market sources, automobile companies are facing higher cost of production issue mainly due to the rupee depreciation against dollar and hike in prices of imported raw materials such as steel. They informed that auto sector is also facing a shortage of raw material.
Meanwhile, the monitoring committee for automobile industry was informed that recent price hike is due to dollar rate (USD to PKR), increase in freight charges and raw materials including operational cost. The industry also provided details on causes of late delivery, CDK imports and production capacity. After due deliberations, the chair directed to carry out forensic analysis of car prices in comparison with factors indicated by the industry as a reason for price change through independent professional expertise. Secretary instructed to complete the forensic analysis within two weeks. The chair also asked the automotive industry to provide localisation plan with time frame as well as safety features compliance report to the Ministry. Meeting was attended by representatives from automakers, 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.
