Is Dollar Rate the Real Reason for Car Price Hikes?
The car price in Pakistan have been going up at a very rapid rate. In the last couple of years, all car manufacturers, including Honda Atlas, Toyota Motors, and Pak Suzuki have hiked the prices of their vehicles.
The companies have cited the increase of the US dollar rate against Pakistani rupee for these jump in prices. According to these manufacturers, they import raw material and many components; henceforth, the high dollar rate means high prices of cars.
Today, we will analyze the claim of these companies to see whether the rate of car prices and the US dollar hike is equal. So, let’s compare the dollar rates and an increase in car prices during the last year.
Honda Car Price Increase:
Last week, Honda Atlas hiked the prices of their cars up to Rs100,000. This was the fourth price increase since May 2019. As mentioned earlier, the company cited devaluation of rupee against the US dollar, one of the primary reasons for this hike.
However, our research paints a different picture. In June 2019, the price of City 1.3L AT was Rs23.19 lacs, while the rate of one US dollar was RS156.78. The current price of this car is Rs26.39 lacs, while the dollar stands at Rs167.88. This comparison shows that Honda has hiked the price by 13.80%, while the dollar’s rate increased by only 7.08%.
Moreover, the price of City 1.5L AT is hiked by 13.45%, while City 1.5L Aspire AT has seen a jump of 11.94%, and rate of City 1.3L MTis increased by 12.39%.
The same is the case with City 1.5L MT and City 1.5L Aspire MT, which have seen hike by 12.95% and 12.74%, respectively.
This data debunks companies claim that it has jacked the prices up according to an increase in the US dollar rate.
Pak Suzuki Car Price Hikes:
Last month Pak Suzuki Motors increased the price of base model of Alto VX by Rs63,000. After this hike, the new cost of this car is Rs11.98 lacs from Rs11.35 lacs.
If we run the same analysis as above, we will find that price of Alto VX was Rs9.99 lacs in June 2019, as the US dollar stood at Rs156.78. Meanwhile, the rate of Alto VXL has reached to Rs15.98 lacs in June 2020, from Rs12.95 lacs in June 2019.
Now, if you compare the price hike and dollar rate from June 2019 to June 2020, you will find that the US dollar has increased by 6.33%, while these two models have seen a price jump of 19.92% each. Meanwhile, Alto VXR has seen the most significant increase of 26.98%, taking its price to Rs13.98 lacs in June 2020, from RS11.01 lacs in June 2019.
The simple data shows that companies have not increased the prices of their cars, as per the increase in the rate of US dollars.
