Auto prices skyrocket, investors take advantage of ‘late deliveries’ – business

KARACHI: Investors seeking delivery of their vehicles booked at old rates after months of delay are benefiting by selling their cars, jeeps and pickups at a hefty premium due to the steep price hike in recent weeks.

With the country on the verge of default, booking suspensions, massive price hikes, a ban on auto financing, and a 25-30 percent drop in sales and non-production days in FY13, local assemblers were the negative effects of a rising dollar. have passed through. Consumers against Rs.

The price difference between old and new locally assembled vehicles is now in the range of Rs 590,000 to Rs 3.12 million, while there is a fear of further price hike in case the rupee continues to depreciate against the dollar.

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With some major assemblers postponing bookings, showrooms are now dealing with customers whose delivery time of vehicles has matured after a long wait of three to six months.

Market sources said the “on the money” or price difference on Kia vehicles is between Rs 1-1.3 million.

For example, investors are seeking Rs 7.6 million for the Sportage all-wheel drive (AWD) model, whose price has been increased from Rs 6.363 million to Rs 7.250 million.

The Kia Picanto automatic bookings are now pegged at Rs 3.2mn at the old prices of Rs 2.312m and Rs 2.7m in the previous months. However, the buyer has to manage more than Rs 1 million to get immediate delivery from the investor.

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Kia Lucky Motor Ltd and Hyundai Nishat Motors increased the prices of various models by up to Rs 1.1 million.

Sources said a similar situation exists in the form of “premium” or difference in Toyota vehicle prices, with investors charging between Rs 500,000 and Rs 2.5 million on different models.

A Toyota dealer said investors are taking a bigger share than the consumer on cars that are now being delivered with the old prices. “You either call this practice ‘on the money’ or a huge price disparity,” he said.

Indus Motor Company (IMC) has increased prices by Rs 590,000 to Rs 3.12 million, followed by Honda Atlas Cars Ltd (HACL) by Rs 785,000 to Rs 1.450 million.

A Japanese assembler car dealer said that while customers are booking their used vehicles six months in advance, they are waiting for the price to be fixed in the market and then selling them.

A dealer said a premium of Rs 1,00,000-150,000 exists on the Honda City as the company is yet to suspend its bookings, while bookings for Toyota and Suzuki vehicles have been closed from May 18 to July 1.

He added that the Suzuki Cultus and Alto660cc are “over the money” at around Rs 500,000 as the company is yet to announce any price hike, but older deliveries booked at lower rates are being approved.

A used car dealer said that in view of the continuous increase in prices, many people had parked their two to three year old cars and bigger vehicles waiting to make the jackpot at a certain point of time.

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He said that due to the bullish trend in vehicle prices, many people have pulled their money out of their business and got into the auto business as investors.

Sources said some of the “on the money” deals are stuck within the showrooms of the authorized dealers, despite tall claims by the assemblers that their showroom employees are not involved in the “on money” syndrome. Many deals are done outside the showroom.

Dealers said the practice of “on-the-money” flourishes due to long delays in delivery of vehicles, usually ranging from two to 10 months.

Published in Dawn, July 31, 2022