According to the Pakistan Business Forum (PBF), the prices of cars in Pakistan have skyrocketed by 149% to reach an all-time high. PBF Vice President Ahmad Jawad stated that this increase is due to the automobile sector linking prices with the exchange rate of the US dollar against the Pakistani rupee.
As a result, three major automobile companies in Pakistan have raised prices three times in just one and a half months, citing rupee’s depreciation against the US dollar.
However, with the Pakistani rupee now appreciating significantly against the US dollar (from Rs 277 to Rs 261), Jawad urged these companies to reduce their vehicle prices and withdraw their last two circulars regarding price hikes issued after January 12, 2023. The analysis of car and bike prices from 2018-23 showed that car prices have gone up by 149%, auto parts prices increased by 90%, and PKR depreciation was 71%.
Ahmad Jawad emphasized that the prices of vehicles in Pakistan were significantly higher than those in neighboring countries and needed to be seriously reviewed by the government. He questioned why vehicles in India were more cost-effective for customers, even after taking into account the currency conversion between Indian Rupee and Pakistani Rupee. Jawad pointed out that the real issue was not just the high prices of cars, but also the fact that buyers did not get the best value for their money. He stated that overpricing without providing international standard safety and quality features was a major concern.
Jawad also highlighted that the burden of volatile economic conditions was transferred directly to the end buyers by the country’s automakers, rather than managing their profit margins. He urged the government to consider implementing price control mechanisms while promoting the auto industry. Additionally, he suggested that the industry should be asked to explain how various factors such as taxes, dollar rates, and local production of parts influenced prices. The government should also monitor automobile prices, he added.
