As the value of the rupee appreciates against the dollar, Pak Suzuki Motor Company has decided to reduce prices ranging from Rs75,000 to Rs199,000.
“Pak Suzuki has reduced prices,” Head of Public Relations of the company, Shafiq Ahmed Shaikh, confirmed. The company has reduced the price of 660cc Alto by Rs116,000 after which the top-spec Alto VXL AGS is available for Rs2.223 million.
Likewise, the prices of WagonR and Cultus have been reduced by Rs147,000 and Rs145,000 respectively. WagonR AGS is now available at a price tag of Rs2.802 million while Cultus AGS costs Rs3.234 million.
AL Habib Capital Markets auto analyst Asad Ali said “following Toyota, Pak Suzuki Motor Company (PSMC) has also reduced its car prices by 5% to pass on the benefit of rupee appreciation against the dollar. However, we do not foresee a major rise in volumes owing to supply restrictions, which have forced the firm to close its plant from August 18 to 19.”
The price of new Suzuki Swift has gone down by Rs199,000 after which the flagship Swift GLX CVT is available for Rs3.760 million.
The automobile industry has not reduced the prices of their vehicles by the same amount that they increased, said Aba Ali Habib Securities auto analyst Ali Asif.
The last price increase in April 2022 was at a dollar parity of 185 as compared to the dollar parity of 235 in August 2022. The current decrease in prices is close to the dollar parity of 220, as companies are maintaining a slight margin in dollars. This may translate into a slight increase in auto sales, he added.
Ravi and Bolan, the four-decade-old vehicles for the middle class, have seen their prices reduced by Rs75,000 and Rs79,000 respectively. Following the price revision, Ravi pickup is now available for Rs1.424 million while Bolan costs Rs1.50 million. After reduction, Bolan Cargo now costs Rs1.487 million.
“There is a shortage of completely knocked down (CKD) parts in the auto sector. If the dollar decreases to Rs200, prices will go down further and the price fall can even be steeper if the rupee floats at 190 against the dollar,” said auto sector expert Sabir Shaikh. “PSMC has reduced car prices after the appreciation of rupee but the price decrease is not equivalent to the earlier increase. Last time, they increased car prices when the rupee stood at 185 against the dollar and now they have passed on the difference,” said auto analyst Arsalan Hanif. Sales will remain under pressure owing to lower inventory levels, resulting in lower capacity utilisation as the State Bank introduced a mechanism to obtain prior approval for imports under HS code 8703, he added.
“This is the first time in history that we are witnessing this decrease in prices after appreciation in the value of the rupee against the dollar,” noted auto sector expert Mashood Khan.
Toyota (Indus) is the market leader in the high-end segment and Suzuki in the small engine market. It is good to see that these market leaders are setting trends that when the dollar will depreciate, they will also revise prices downwards, he added.