KARACHI – An IMC spokesman, while reacting to statements from some analysts and government officials that Indus Motors Company (IMC) has massively increased prices of its vehicles during the past two years, said that facts are being distorted which is causing an irreparable damage to the local industry.
In a statement, an IMC spokesman said that IMC has increased its prices by only seven percent during the last two years (Jan 09 till Dec 10). He stated that reasons for an increase in locally produced car rates are not hidden from consumers who understand that Pakistani currency has devalued, in addition to a surge in commodity prices.
He lamented that rates of natural gas, electricity, diesel and petrol have swelled by 13 percent, 34 percent, 34 percent and 20 percent respectively during the same period. In addition, steel prices increased by 27 percent from $586 to $746 per tonne, while rates of polypropylene, aluminum, copper and lead swelled by 67, 35, 24 and 45 percent respectively. The mentioned commodities are important inputs in car production, while local OEMs absorb most of the increase in cost and pass a small amount to consumers, he added.
Moreover, dollar rate has increased by 6.1 percent against the rupee from June 2009 till date, while the rupee has depreciated 20 percent against Japanese Yen during the same period. This has increased the cost of imported parts used in locally made vehicles. He said that car makers generally had to adjust prices, keeping in view the increase in cost of production. However, he added that producers have also made downward adjustments in rates whenever possible.
He negated the impression that previous allowance of five years old cars did not affect local OEMs and said that the year had seen excess demand, in addition to heavy investments of local manufacturers to enhance productivity.
