PSMC Raises Vehicle Prices To Offset Currency Fluctuation
News: Pakistan Suzuki Motor Company (PSMC) has hiked the prices of all its vehicles by around US$190 to offset the weakening of the rupee against the US dollar, reports the Pak Tribune. The company said its new revised ex-factory prices will be effective from October 1 2013. In response, the All Pakistan Motor Dealers Association (APMDA) criticised three local auto companies, including PSMC, claiming they have made it a regular practice to increase vehicle prices after every five to six months citing the higher US dollar value as their reason while importing parts from Thailand and China.
BMI View: BMI remains cautious on the near-term outlook for new car sales in Pakistan in 2013, with a variety of negative factors informing our view. However, the longer-term picture holds more promise. To look at the near-term outlook first, we believe that the budget for FY2013/14 is unlikely to provide any support to auto sales, which remain mired in a downtrend due to weak demand. Overall, we believe that the budget can be broadly seen as a mixed bag. It outlines a broad trajectory of fiscal consolidation for the next fiscal year and includes austerity measures, which we believe will continue to pose downward pressure on auto sales in the short term.