Rising car prices !! Who will go after Changan? ??


Remember how the government reduced car prices not so long ago? The new automobile policy (2021-2026) introduced tax advantages for all cars assembled locally. Guess what? Auto manufacturers are preparing to raise prices. Now guess why? Because the raw material prices and transport costs have increased.

An automobile manufacturer has already taken the lead. We just saw the first episode of the Car Price Hike show starring Changan. A Massive increase in car prices in Changan left us all in awe. But the show is only just beginning, as price hikes from other automakers are on their way!

Increase in steel prices

In a recent media report, Changan Pakistan’s sales and marketing manager, Syed Shabbiruddin, spread the word. He said that about 70-80% of a typical passenger car is made of some quality imported steel. The price of a car is therefore very sensitive to the price of steel and the exchange rate. If steel prices rise, car prices will inevitably rise.

He added that even motorcycle manufacturers have recently passed the burden on their consumers (by raising the prices of bicycles). Soon, automakers will also have to raise vehicle prices due to rising steel prices and rising shipping costs.

The fact has been validated by a research analyst at JS Global Capital Limited. He revealed that Cold Roll Channel steel sheets previously cost Rs. 132,000 per ton a year ago. Now, the price of steel sheets increased by 75% at Rs. 239,000 per ton.

High shipping costs

Sales and Marketing Manager Changan added that the the shipping cost has become abnormally high due to the recent wave of Delta variant in South Asian countries. This is another factor that pushes all businesses, especially new entrants, to raise car prices.

Sources in the auto industry have also confirmed this fact. The cost of shipping a container before the pandemic was $ 800, which rose to $ 4,000.

More price increases are coming!

For the first time in Pakistan’s history, car prices have fallen across the industry. All of the country’s automakers have slashed prices, thanks to massive tax breaks from the new auto policy. But now it looks like everything was reversible. All companies are likely to reverse the price cuts or maybe make the prices even higher than before, just like Changan.


Comments are closed.