Car, motorbikes stay costly in 2008

[Naveed Yaseen]

By Aamir Shafaat Khan
KARACHI, Dec 31: The prices of locally-assembled cars rose by an average 30 per cent, while Japanese and Chinese bike makers raised rates by over Rs13,000 and Rs6,000 per unit, respectively, in the calendar 2008.

A price comparison between January 1-Dec 31, 2008 shows that Suzuki Mehran VX 800cc is now priced at Rs407,000 as against Rs325,600 on January 1, while Mehran VXR CNG carries a price tag of Rs504,000 against Rs408,000.

Suzuki Alto VXR (CNG-fitted) now sells at Rs660,000 as compared to Rs521,000, while Cultus 1,000cc VXR CNG is selling at Rs814,000 against Rs632,000. Cultus VXL CNG is available at Rs884,000 as compared to Rs689,000.

Bolan van AC and CNG is priced at Rs575,000 as against Rs476,500 while its standard model with CNG is sold at Rs518,000 as compared to Rs417,000. Ravi pick-up is tagged at Rs456,000 as compared to Rs347,000.

Suzuki Liana RXI manual transmission CNG is priced at Rs1,075,000 as compared to Rs825,000.

Toyota Corolla XLI and GLI now sells at Rs1,269,000 and Rs1,389,000 as compared to Rs915,000 and Rs1,005,000. The Indus Motor Company (IMC) has introduced the new Corolla a few months back. The 2.OD now sells at Rs1,719,000 as compared to Rs1,160,000.

Cuore CX metallic and CNG are priced at Rs619,000 and Rs625,000 as compared to Rs451,000 and Rs456,000. Cuore Eco Metallic is available at Rs709,000 as against Rs497,000. Cuore CL CNG is priced at Rs609,000 as compared to Rs431,000.

Toyota Hilux and Hilux 4x4 are available at Rs1,359,000 and Rs1,399,000 as compared to Rs999,000 and Rs1,039,000. Honda VTI Oriel Prosmatec sells at Rs1,859,000 as compared to Rs1,506,000.

Car makers had pushed up the prices due to surging steel prices and yen appreciation against the rupee in the first half of 2008.

But they were reluctant to pass on the impact of sharp decline in international raw material and steel prices in the past few months. Even the parts and accessories makers of their companies had not slashed their prices.

The assemblers are now worried over the falling sales owing to slump in demand which has forced many a auto makers to downsize their workforce to cut their running expenditures. Sources in car industry said that Pak Suzuki Motor Company (PSMC) had already eliminated around 600 contractual jobs in the last four months.

According to figures of Pakistan Automotive Manufacturers Association (PAMA), overall car sales (Toyota Corolla, Cuore, Honda City, Honda Civic, Suzuki Mehran, Alto, Liana, Cultus and Hyundai Santro) in July-November 2008 plunged by 46 per cent to 33,853 units from 62,815 units in the same period of 2007. There were no production figures of Hyundai Santro in October and November.

Car sales had hit the bottom owing to political and economic instability, increase in prices and expensive car financing.

The imposition of five per cent federal excise duty (FED), increase in sales tax to 16 per cent from 15 per cent and levy of 2.5 per cent withholding tax on purchase of cars had also hit sales. The increase in taxes and duties makes an impact of Rs125,000 alone if the car is priced at Rs500,000.

Head of Research at Jehangir Siddiqui Research Mohammad Sohail painted a bleak outlook for car makers in 2009 owing to falling purchasing power caused by surging food prices coupled with high car financing rate.

Imported car have also become costlier in 2008. Mitsubishi Lancer 1,300cc GLX is now available at Rs1,699,000 as compared to Rs999,000 in May 2008.

Motorcycles

The Honda 70cc and CG-125 are now available at Rs62,900 and Rs81,800 as compared to Rs49,900 and Rs68,000 in January 2008. Suzuki Eco 70cc is priced at Rs61,500 as against Rs49,800 while Yamaha Junoon 110cc carries price of Rs68,500 as compared to Rs55,000.

The Japanese bike makers have not yet reduced the rate despite cut in raw material prices in the last few months.

The price of Honda CDI-700cc was Rs49,900 in January, now the bike is available at Rs62,900.

The Chinese bike makers have increased the average price of bike to Rs38,000 from Rs32,000. A Chinese bike maker linked the price hike to devaluation of the rupee against the dollar coupled with increase in raw material prices in the beginning of the year.

He said that Chinese bike makers have started reducing the rate after fall in raw material prices like plastic parts, aluminium, sheet metal, chrome etc. The price of raw material had started falling from October 2008 after hitting the peak in the same year.

He added the average price of Chinese bike which had touched Rs40,500, had been brought down to Rs38,000 in December.

http://www.dawn.com/2009/01/01/ebr4.htm