PSMC Raises Vehicle Prices To Offset Currency Fluctuation

News: Pakistan Suzuki Motor Company (PSMC) has hiked the prices of all its vehicles by around US$190 to offset the weakening of the rupee against the US dollar, reports the Pak Tribune. The company said its new revised ex-factory prices will be effective from October 1 2013. In response, the All Pakistan Motor Dealers Association (APMDA) criticised three local auto companies, including PSMC, claiming they have made it a regular practice to increase vehicle prices after every five to six months citing the higher US dollar value as their reason while importing parts from Thailand and China.

BMI View: BMI remains cautious on the near-term outlook for new car sales in Pakistan in 2013, with a variety of negative factors informing our view. However, the longer-term picture holds more promise. To look at the near-term outlook first, we believe that the budget for FY2013/14 is unlikely to provide any support to auto sales, which remain mired in a downtrend due to weak demand. Overall, we believe that the budget can be broadly seen as a mixed bag. It outlines a broad trajectory of fiscal consolidation for the next fiscal year and includes austerity measures, which we believe will continue to pose downward pressure on auto sales in the short term.

This article is tagged to:
Sector: Autos
Geography: Pakistan

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