Car Price Hike, how bad really is it? PKR vs US$

[Mephisto]

I did a quick analysis of car price in PKR vs US$ Dollar price before and after the severe inflation we witnessed at the end of last month.

This was to see if car manufacturers were actually making more profit, or were they willing to take a hit. The results are pretty interesting.

My Analysis only covers few manufacturers but I think it will give everyone an Idea of what's going on...

Based on Interbank rate:
1 USD on OLD rate = 230.89 (25th Jan 2023)
1 USD on New rate = 271.36 (2nd Feb 2023)

All Toyota Old prices (except the one highlighted in Grey) are before the recent price hike as that price only stayed for 2-3 weeks until the latest price change, therefore they are calculated at USD 228.14 (12th Jan 2023). The ones in Grey are using the last price hike that happened in 13th Jan 2023.

As you can see, each manufacturer is actually taking a hit on the cost by at least USD 1000 (Except Toyota Motors). This goes to show that the prices are actually dropping.

EDIT: You may need to zoom in to see the data. Let me know if it is still difficult to read and I'll post it elsewhere...

[sargodhiyan101]

Wow, what a detailed breakdown, Impressed.
This is really sad tho

[VCheng]

This goes to show that the prices are actually dropping.

No, all it means is that further prices hikes will be forthcoming, and pretty significant ones at that. No way around that.

[Mephisto]

Thanks, all it needs is the old price and the new price, everything else is just formulas.

I had requested this as a feature on Pakwheels to compare all new price hikes with USD to see if the price were justified. For now, I did it myself, but would be good to have this as a section so we know if price hikes are justified.

[Mephisto]

No, all it means is that further prices hikes will be forthcoming, and pretty significant ones at that. No way around that.

You could be right, but if they increase the salaries of their local employees and the cost of running operations also co-relate to USD price (electricity, rent etc) then a further price hike would make sense. But since only the cost of importing CKD kits has increased to USD, the other factors won't change that significantly (for now) then it seems the ~1K price difference is just extra savings in this economy.

So I think that ~1K USD difference in price is just savings that are forwarded on to the customer. Unless these corporations want to increase their profit further, I don't foresee a major price hike if the USD stays the same.

For reference, here is a price comparison of Hyundai Sonata 2.5 at the time of price hikes:

Launch (5th July 2021) Rs7,099,999 (USD 44,885 at Rs158.18 per USD)
1st Jan 2022 Rs7,299,000 (USD 41,351 at Rs176.51 per USD)
1st Feb 2022 Rs7,799,000 (USD 44,204 at 176.43 per USD)
1st July 2022 Rs 8,499,000 (USD 41,625 at Rs204.18 per USD)
15th Sept 2022 Rs 8,899,000 (USD 37,726 at Rs235.88 per USD)
Now Rs 9,399,000 (USD 34,636 at Rs271.36 per USD)

By looking at this, it would make sense the price would further increase, but let's see what they do. Sonata may not be the best example here since it is an End-of-Life product, and a price drop could be just due to that. However I just don't have data or time to pull data for another car at the moment lol.

[roboxx]

Whatever it is, it's ridiculous and extreme injustice to the people of Pakistan by current rulers. I didn't see such rapid currency devaluation in my 4 decades.

[pwuser148178846082]

Good job

[v9sDEF]

Car manufacturers do not price according to prevailing USD/PKR rate, rather, they have a buffer that's priced in - so to compare prices on the basis of converting PKR values to USD on prevailing rates gives an incomplete picture.

Most likely, the previous prices were priced internally at 230+40=270 and new ones are priced at 270+20=290 or something along those lines. OR they will implement a step-wise price increase (calculated before hand and taking into consideration profit scenarios) and you can expect another hike soon.

Auto manufacturers almost never pass on benefit to customer - their target is to maintain the prevailing margins that they have set.