Car and bike assemblers have disappointed their customers by not reducing prices despite around 20 percent depreciation of Japanese yen against the rupee in the last six months making parts import cheaper, local media reported.
On September 15, 2012, one yen was equal to Rs1.1944 as compared to the current rate of Rs0.9609. From January 2013 till to date the yen lost its value against Pak rupee by 13pc.
In the past, local car assemblers and bike makers were too quick in pushing up the prices of the vehicles linking it to yen appreciation against the rupee.
However, for the last six months, they have not shown any interest in passing out the benefit of falling yen to the end users in shape of price cut. Even the Japanese bike makers had been continuously jacking up prices for the last few months while car assemblers have kept the price unchanged.
A local part vendor said, “Currency makes a big impact on car pricing. Part of the blame lies with slow localisation by the assemblers.”
He said that tractor prices took years to move upward ‘thanks to 95pc localisation’, adding: “Localisation of parts in cars varies as it is 70pc in Suzuki Mehran and 40-55pc in big engine power costly cars.”
“When yen moves up against the rupee, then assemblers come out with immediate price hike and after two months they again raise prices to offset impact of currency on production cost,” he commented.
Chairman All Pakistan Motor Dealers Association (APMDA), H M Shahzad said the assemblers had deprived consumers, ‘particularly those who had purchased costly cars in the last six months’.
“When assemblers were criticised by dealers and consumers over raising prices on exchange rate parity, the assemblers used to say that their prices of kits and accessories were linked with yen movement.
Based on this claim they should now act to bring the prices down as per around 20pc reduction in yen value,” he added.
“The assemblers should reduce the price immediately or refund the amount to the consumers who had purchased cars in the last six months,” he said adding that the caretaker government had not taken the assemblers to the task for not sharing the yen fall with the consumers. He said that one thing is certain the losing value of yen had definitely made imports of cars parts cheaper for the local car assemblers and it must had reduced the assembling cost.
He hoped that that the upcoming PML-N government would review the performance of local assemblers in the interest of consumers. A leading car assembler said that assemblers were also hit by rising dollar value against the rupee and many assemblers were facing problems of continuous fall in their sales volume for the last few months. Besides, Thai bhat value had also improved as many parts also arrive from Thailand.
“Price of locally produced parts being supplied to car assembles by local vendors also counts here as vendors also import raw material from abroad for local parts manufacturing. Here rupee-dollar fluctuation makes an impact on the cost of production,” he added.
Other factors like rising utility bills had also pushed up the cost of production but to some extent its impact was nullified by the losing yen against rupee which had kept the price of cars stable, the assembler said. “We have not increased the prices for the last one year,” he added.
Chief Coordinator Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh said yen’s rise and fall had nothing to do with the Chinese bike assemblers as their imports of parts and kits are based on dollar payment terms.
“However, Japanese bike assemblers should pass on the benefit of losing yen to the customers,” he added.
Your information is very helpful for me because i was also thinking to buy this car but unfortunately this car is very expensive for me. Car assemblers should cut the price to attract more customers but let's see what happen in coming days.
Comments are closed.