KARACHI: An unexpected, massive cut in the price of Kia Stonic has triggered a price war among auto assemblers for some models, forcing Pak Suzuki Motor Company Ltd (PSMCL) to make its Swift models cheaper by up to Rs710,000.

The new prices of Suzuki Swift GL MT, GL CVT and GLX CVT are Rs4.336 million, Rs4.560m and Rs 4.719m, down by Rs85,000, Rs159,000 and Rs710,000, respectively, with effect from May 1, according to a PSMCL notification issued to dealers.

Shafiq Ahmed Shaikh, who heads the corporate affairs department of PSMCL, said the price cut in Swift models has been done for some time due to economic stability and steadiness in rupee-dollar parity.

He also pointed out that the government had imposed no taxes and duties of late.

On April 29, Lucky Motor Corporation Limited (LMCL) made a huge price cut of Rs1.513m in the price of Kia Stonic EX Plus, bringing it down to Rs4.767m from Rs6.280m.

The company’s dealers had been offering price reduction last month on Kia Sportage, too.

Market sources said since new buyers of Toyota Yaris and Honda City had shifted towards Stonic, the company is now unable to meet the demand and has decided to close down the booking for Stonic.

“Those buyers who have booked Stonic in a hurry have got delivery orders in May and June and some by July-September after making partial payment at the time of booking,” an LMCL official said.

The company, he added, would ensure imported CKD availability and jack up the production capacity to meet the rising demand. “We have received an overwhelming response from customers after an unprecedented price drop in the auto industry,” he added.

The price war has proved a boon for late buyers of Kia Stonic, but it has frustrated those buyers who lifted the vehicle at a high price of Rs6.28m, which now costs Rs4.767m.

The buyers of Suzuki Swift are likely to get the same shock.

A showroom official said a buyer who had purchased Stonic at the higher price, would now be at disadvantage in case he sells its costly vehicle after the price cut.

Another auto showroom official termed the price war a brief respite before announcement of the budget for FY25.

He said Indus Motor Ltd (IMC) is coming up with a major facelift of Toyota Yaris in July. However, as past practice shows, a facelift usually comes with a price increase instead of any reduction.

A market analyst said the cut in the prices of four vehicles (Toyota Yaris, Honda City, Kia Stonic and Suzuki Swift) had been made to keep these vehicles below the ex-general sales tax price of Rs4m.

A year ago the government had raised the GST on vehicles of 1400cc and above to 25 per cent from 18pc, but Kia Stonic did not fall in this category due to its low engine power.

In March, the government removed an anomaly by capping 25pc GST on ex-GST price of Rs4m.

Honda Atlas Cars Ltd had slashed the price of Honda City MT 1.2L and City CVT 1.2L by Rs50,000 and Rs140,000, respectively. Tjis was followed by a price cut of Rs73,000-133,000 in Toyota Yaris models during the same month.

Published in Dawn, May 3rd, 2024