Is the Latest Price Increase by IMC Justified?

Is the Latest Price Increase by IMC Justified? 1

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.

Related: Can Increase in Car Prices Bring Desired Results?

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.

Is the Latest Price Increase by IMC Justified? 2

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.

Related: Troubling Times for Honda and BR-V in Pakistan

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.

Is the Latest Price Increase by IMC Justified? 3
Prices of newly launched Yaris were also revised, which is yet to hit the local roads

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.

Related: Are Tables Turning for Pak Suzuki?

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.

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About UsmanAnsari

A 3d animation professional with over 19 years of industry experience, an avid car enthusiast, petrolhead and social media influencer. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com

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Shahid Khan
Shahid Khan
5 months ago

At least you guys have courage to speak up so openly. I think their intentions are clear. They are seeing a dead end and they are trying to make maximum money possible. Otherwise I don’t understand these steps which are not good for long term

Saber Rider
Saber Rider
5 months ago

Time for Indus to pack up and leave. We will be happy with imported used cars which are lot better than these tin cans they make

Aamir Ali
Aamir Ali
5 months ago

Good points. But imc is not a company, it’s mafia & they only know to make money

M Asif
M Asif
5 months ago

Kusoor govt ka hai jo khulee chhoot Dee hoi hai inko awr koui roknay poochnay Wala nai

Talha Qidwai
Talha Qidwai
5 months ago

yeh hota hai article

Saadu
Saadu
5 months ago

Good article

تنویر امام
تنویر امام
5 months ago

بالکل نہیں ,ناجاءز پیسہ منہ کو لگ گیا ہے