KARACHI: The local auto industry is facing difficulties due to rising raw material prices and disruption in the global supply chain, while the last 10 months have seen an increase in motorcycle prices from 8,000 to 52,000.
After the car companies, now the motorcycle companies have also started passing on the effect of the increase in the production cost of spare parts to the consumers. The availability of prices is being severely affected
According to the local auto parts manufacturing industry, steel sheet prices have risen by 35% in the last 15 months, while basic metals such as aluminum, copper, plastics and resin have risen by 50% in one year. Prices of locally scrap raw materials aluminum and copper are also rising in line with the international market.
According to Sabir Sheikh, Chairman, Pakistan Motorcycle Assemblers Association, the price of 70cc motorcycles has gone up by Rs.52,000/-
According to Sabir Sheikh, due to the trend of home delivery service during the lockdown, the sales of motorcycles increased significantly and despite the increase in prices, the sales of motorcycles continued to increase. However, in March 2021, the sales of motorcycles are declining.
He said that motorcycle manufacturers were raising prices on the pretext of rising raw material prices and delays in shipping and shortage of containers, on the one hand, and the strengthening of the rupee against the dollar, on the other. The effect is fading as the Chinese currency appreciates. Most of the parts and raw materials are imported from China, so the people are not getting the benefit of the cheapening of the dollar.
On the other hand, Chairman Pakistan Association of Automotive Parts and Access Series Manufacturers (PAPAM) Abdul Rehman Aziz termed the increase in production cost due to rising prices of raw materials as a threat to the auto industry and imposed duty on raw materials from the government. And what about tax cuts?
Chairman Papam said the government could provide relief to the auto industry by reducing the regulatory duty on raw material imports as long as the crisis in raw material prices does not abate.
He said that a 30% regulatory duty has been imposed on the import of raw materials. By reducing this rate or eliminating it for a specified period of time, the cost of spare parts can be reduced, which will also make it possible for motorcycles or carmakers to maintain prices.