United Motors, manufacturers of motorcycles and Pakistan’s lowest priced hatchback 800cc Bravo, have increased the price of their cars.
The prices have been increased by a
minimum of Rs119,000 and a maximum of Rs140,000.
According to the company notification,
the new rates will be applicable on all bookings made from December 1 and
onwards. However, the new prices of the cars will not be applicable on all the
full payments orders and for those customers who have deliveries due by
December.
Following are the new prices of United
Bravo and Alpha models.
United Bravo 800cc has seen a price hike of Rs119,000 and will now cost Rs1.15 million.
United Alpha 1000cc hatchback has witnessed an increase of Rs140,000 after which it is available for Rs1.40 million.
The car competes with Suzuki’s 660cc
Alto on price. On the basis of its features especially engine size, it falls in
the category of Suzuki Cultus, Wagon-R and KIA Picanto.
Why car prices went up
Pakistan’s auto industry is highly dependent on imported parts. At least half of the total car parts are imported. This means the price of a car in Pakistan is dependent on the dollar rate, which has appreciated against the rupee.
Iftikhar Anjum, a United Motors dealer, said that the prices of raw material such as steel, aluminum and paint went up in the international market and the dollar rate is appreciating day by day which continuously puts pressure on the imports bill.
Apart from that, there is a shortage of auto parts in the international market. “We import 60% of the spare parts from China,” Anjum said.
Sabir Sheikh, a motorcycle dealer and chairperson of the Pakistan Motorcycle Assemblers, said that 70% of the spare parts for motorcycles are imported from China.
The car dealers say that the sea freight charges have gone up in the last few months and the industry is facing supply issue due shipping containers shortage.
Anjum said that if the customers are priced out of the cars, it can lower the company’s sales. As a result, profits will remain low.
Sabir Sheikh said that the industry is facing a supply problem, adding that delivery of parts and raw material have already been disturbed since the start of coronavirus. Moreover, inflation increased to a four-month high of 9.2% on a year-on-year basis in October 2021 as compared to 9.0% of the previous month, the higher rate of inflation is making plastic related parts more expensive in Pakistan, he said.
Smaller brands and used cars
Sheikh said that since smaller auto companies can’t work on their quality infrastructure and localization, the sales of the their cars will be affected due to rise in the price as people would prefer big brands even if the price of those cars goes up in the same proportion.
There is no comparison between top brands and car from less well known manufacturer, sheikh added.
Sabir Sheikh said that the resale value of used car will also go up as car owners take advantage of high prices.
