Impact of dollar depreciation:Imported used cars’ dealers to cut prices by next month

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KARACHI: Imported used cars’ lovers will enjoy the price cut upto 6 percent on vehicles from next month owing to almost 12 percent depreciation of US dollar against Pakistan rupee till to date.


The dealers are ready to pass on the reduced cost impact to the customers, Daily Times has learnt.


With the local assemblers’ criticism the importers are not passing on limited price relief to the consumers in the wake of having 100 percent exposure to forex, the local dealers of imported used cars have confirmed the price cut was being considered.


An owner of a local car showroom Abbas Jalil said, “As per recent foreign exchange variation around Rs 25,000 to Rs 30,000 cut in small segment cars is rational as Telegraphic Transfer (T.T) rate of Japanese yen has been dropped to 0.95 paisa currently as comparing to Rs 1.025 in January 2014”.

Used car importers were bearing unexpected losses as the customers asked discount on already available cars referring to foreign exchange fluctuations. 
The consumers have become more aware now a days comparatively to past, he reasoned.
He said some of dealers have started offering discounts but majority was waiting for their new shipments that were expected to reach Pakistan in next few weeks on which importers have got concessions in price and duties due to appreciation in Pakistani rupee.
Chairman of All Pakistan Motors Dealers Association (APMDA) H M Shahzad said, “Importers are already suffering from getting depreciation only for two years but the cars being imported are of three years age limit”. 
However, he confirmed local auto dealers were ready to pass on the cost efficiency impact to the consumers by reducing car prices up to Rs 15,000 for 1000 cc or below cars while price cut will be varying up to Rs 250,000 to Rs 300,000 on 1800 cc and above cars.
He said abrupt significant drop in value of US dollar was hurting the car sales, as the consumers were demanding instant discount pertaining to sharp decline in foreign exchange. 
But, the importers were not able to reduce the prices of available stock that had been imported and duty paid prior to starting the recent US dollar phenomenon, he added.
He said the limited cost concession would only be given on the import duties as the used car prices of three-year-old were higher as compared to five-year-old car.
If the importers get three years depreciation then the price cut on small cars below or 1000 cc could be Rs 36,000 in the wake of recent dollar depreciation.
In view of recent drop in forex rates Pak Suzuki Motor Company reduced car prices ranging from Rs 5,000 to Rs 100,000, Indus Motor Company Limited has brought down the prices of its cars and pickups by up to Rs 75,000 and Honda Atlas Cars Pakistan Limited has already reduced car prices by Rs 30,000-40,000.

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