KARACHI: Amid a slump in demand, assemblers have made a steep rise in the prices of vehicles in the last 16 months despite persistent grilling by the Sub-Committee of the Public Accounts Committee (PAC) on various issues hurting consumers’ interest.

The rupee has shed its value against the dollar by 58pc in the PDM tenure from Rs182.93 on Aug 11, 2022 to Rs289 on Aug 9, the day Prime Minister Shehbaz Sharif left the office.

However, price increases in various models are on par with the drop in rupee value despite higher localisation. In many costly variants, the price hikes are far steeper due to low localisation.

It suggests that the rupee depreciation plays a key role in pushing up the landed cost of imported parts and accessories costlier, thus exposing low and high levels of localisation by the assemblers.

Regulators fail to take any action against assemblers for lack of safety standards

A price survey revealed that Honda City manual transmission 1.2L, CVT, 1.5L CVT and ASP CVT 1.5L now costs Rs4.799 million, Rs4.929m, Rs5.549m and Rs5.979m as compared to Rs3.219m, Rs3.249m, Rs3.446m and Rs3.749m when the PDM regime took to power.

Honda Civic 1.5L MCVT, Oriel MCVT and RS1.5L LLCVT now carry price tags of Rs8.599m, Rs8.949m and Rs10.199m as compared to Rs5.399m, Rs5.649m and Rs6.499m.

Toyota Yaris GLI 1.3CVT and ATIV High CVT are being sold at Rs4.801m and Rs5.011mn as compared to Rs3.109mn and Rs3.229m.

The prices of Toyota Corolla 1.6 MT, AT and 1.8 Altis Grande CVT Black interior models are 6.182m, Rs6.782m and Rs7.812m as compared to Rs3.749m, Rs3.929m and Rs4.689m.

Fortuner Hi Petrol, Diesel and Legender sell at Rs18.114m, Rs19.094m and Rs20.144m as compared to Rs10.949m, Rs11.489m and Rs12.099m.

Kia Picanto Automatic, Sportage FWD, Sportage AWD, Stonic EX and Stonic EX Plus are now selling at Rs3.350m, Rs8.190m, Rs8.820m, 5.350m and Rs6.050m as compared to Rs2.500m, Rs5.5m, Rs6m, Rs4.150m and Rs4.450m.

The new price of Suzuki Alto VX, VXR and AGS models are Rs2.251m, Rs2.612m, Rs2.799m and Rs2.935m as compared to Rs1.425m, Rs1.675m and Rs1.886m.

Suzuki Wagon VXR, VXL and R AGS models now carry a new price of Rs3.214m, Rs3.412m and Rs3.741m as against Rs2.019m, Rs2.129m and Rs2.319m.

The new rates of Suzuki Cultus VXR, VXL and AGS are Rs3.718m, Rs4.084m and Rs4.366m versus Rs2.250m, Rs2.474m and Rs2.662m while Ravi carries a price of Rs1.216m.

Swift GL MT, GL CVT and GLX CVT are fixed at Rs4.256m, Rs4.547m and Rs4.960m as compared to Rs 2.694m, Rs2.908m and Rs3.169m.

The PAC in its several meetings highlighted issues like rising car prices, non-delivery of vehicles despite taking full advance money, holding up billions of rupees of consumers and on-money due to running of plants at low capacity.

The committee also raised concerns over the lack of quality and safety standards, checking of auto sector accounts, production capacity, involvement of auto assemblers and their dealers in collecting millions of rupees from the customers as on-money, no engine-making efforts in Pakistan, prevailing Euro 2 standards instead of Euro 5 and failure to localise parts.

However, the PAC in its July 5 meeting expressed concern about the sub-standard quality of the Suzuki variants which lack airbags, thus creating doubts about their exports.

It also discussed alleged under-invoicing issues by MG Motors and other automobile assemblers.

The committee showed annoyance over the charging of extra charges despite full payments made to the companies thus compelling consumers to sign affidavits. One of the members of the PAC was charged Rs1m extra at the time of delivery of the vehicle.

The committee was informed that 42-56pc of the total cost of vehicles goes to the national exchequer on account of different taxes whereas the remaining to the assemblers.

Additional duties and taxes were imposed on the import of parts included in the SRO to be manufactured locally to achieve localization. It was noted that raw materials are being imported and the rupee devaluation makes a direct impact on the vehicles’ cost.

The committee observed that no serious efforts were made by the government on the assemblers to export their cars, while quality and safety standards as per global standards also lack.

Country’s sale of cars, jeeps, pickups and vans had plunged by 55pc in FY23to 126,879 units from 279,267 in FY22 due to rising price trend in vehicles, expensive car financing, plant shutdowns on account of parts shortage and delay in opening LCs.

Published in Dawn, August 20th, 2023