This is a lesser increase in auto financing than last month, indicating that recent price hikes have had a negative influence on car demand, as projected by industry analysts early this year.
In a March quarterly financial briefing, Ali Asghar Jamali, CEO of Toyota Indus Motor Company (IMC), stated that automakers had no choice but to raise prices due to local currency depreciation and increased operational costs.
Earlier this month, the Engineering Development Board (EDB) convened a meeting with all of Pakistan’s leading automakers. The Ministry of Industries and Production (MoIP) asked justification from the corporations for the price hikes during the meeting.
Despite MoIP’s worries, automakers insisted that price increases are out of their hands and could occur many times this year. At the end of the conference, the government issued a warning to all automakers about frequent price increases.
To prevent the import of CKD kits for up-market cars, the Ministry of Finance has proposed a 100 percent regulatory duty (RD) hike on domestically manufactured cars with engines larger than 1300cc. To rein in the increasing import bill and maintain the local currency, they also put a blanket ban on Completely Built-Up (CBU) vehicles.
Pakistan’s economy is in difficulty these days, and the impacts are being felt across the board, including in the auto industry.
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