Carmakers in Pakistan are facing the challenge of keeping car prices at their current levels considering the higher exchange rate, increasing freight cost, and soaring raw material rates.
Indus Motor Company Chief Executive Officer Ali Asghar Jamali said on Wednesday, that the depreciation of the rupee, high freight, and raw material costs are major concerns for carmakers in the country. He added that these factors are impacting car prices and they are becoming out of control for vehicle manufacturers.
He indicated that Indus Motor might raise the prices of vehicles as global raw material prices soar and the Pakistani rupee depreciates, adding, “A hefty surge in the cost of raw material including steel, copper, and aluminum is being witnessed across the world. Additionally, rupee depreciation is putting immense pressure on the original equipment manufacturers.”
Jamali noted that steel price4s had also spiked by a whopping 215% since March 2020 in the international markets.
Along similar lines, prices of aluminum crossed the $3,000-per-ton mark in October of the ongoing year while copper rates touched $10,000 per ton. Jamali noted, “The irregular fluctuation of the rupee combined with the hike in international commodity prices will remain a concern for the carmakers”.
While answering questions pertaining to new investment by the firm, he added that the company was making efforts to enhance production capacity by 20% by April 2022 in order to meet ballooning demand.
He reported that a groundbreaking ceremony was held recently at the company’s plant to increase the international multipurpose vehicle (IMV) production by more than 22%.
He noted that his company recently invested more than $100 million for the production of hybrid electric vehicles in the country.
Jamali said, “The investment is aimed at localization of components, plant expansion and production preparation for the first hybrid electric vehicle”. He showed appreciation for the government’s policy to encourage low carbon mobility solutions under the prime minister’s vision of “Clean and Green Pakistan”.
Jamali announced that his company will be introducing an efficient fourth-generation hybrid electric vehicle in local markets soon.
He said, “Hybrids are a practical and sustainable solution for achieving mass electrification in Pakistan”.
