Indus Motor Company (IMC) has revised the prices of local assembled Toyota cars in Pakistan by up to Rs 500,000. The new prices will come into effect from the 15th of April 2020. According to the company, the revision in prices comes in wake of the recent depreciation of Pak Rupee against the US Dollar which has now hit a record-low at Rs 167.
Interestingly, IMC has been once again too quick to respond to the latest currency decline by blatantly passing all the impact to the consumer just days after the depreciation occurred. However during the past several months when the Rupee recovered by 7% and in fact stood firm at Rs 154 against the Dollar, the local automakers including IMC instead of lowering the prices, pushed them up even further which was plainly a move to dampen their declining profits amid poor sales.
It is quite hard to believe that why IMC which claims to have achieved more than 65% localization on Corolla remains heavily dependent on exchange rates. And more surprisingly just a 7% increase in Rupee-Dollar parity results in an almost 100% impact on price for a car that has allegedly achieved 65% localization is something which is beyond understanding.
Obviously it’s not that IMC had imported the components yesterday and are putting together today to sell the car tomorrow. The components were supposedly imported when the Rupee was positioned at Rs 154 against the Dollar, and with bulk of unsold inventory due to dismal sales & the plant already observing shutdowns due to COVID-19 lockdowns it’s hard to understand why the company needs to revise the prices of cars that were put together using components that were imported when the Rupee was rather stronger than it is today. The company could have easily absorbed the impact considering the fact that they already revised the prices in January 2020.
The PAMA stats for March 2020 shows that sales of IMC has already cut to half while there is no hope of recovery soon as long as the country is going through coronavirus lockdowns. Perhaps it is about time local auto assemblers including IMC should work towards making their products more attractive towards the customers and should encourage them into buying by offering worthy incentives rather than slapping outrageous price increases ever so often to rescue their profit margins.
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Because that’s simply how you survive in a challenging situation, otherwise as evident from the circumstances, consumers from now on will be more focused on spending on essential goods and services, and cars may be far from their minds. How positive this price increase will be for IMC & Toyota in Pakistan, only time will tell. What is your opinion about this latest price hike? Let us know with your comments.