Auto price cuts unlikely despite cheaper dollar

Amid the rupee strengthening and the government’s intention to bring down the dollar rate to Rs250-260 soon, the country’s auto assemblers appear a bit reluctant to pass on the benefit of the currency appreciation to the consumers. When Dawn contacted assemblers to take their viewpoint regarding any chance of price drop in locally assembled vehicles, their quick answer was “No.” Consumers witnessed a steep rise in prices in the 16-month tenure of the PDM government which according to the assemblers was because of higher landed cost of imported parts and accessories due to rupee depreciation against the dollar coupled with rising overhead charges like inflated power and gas bills. However, the rupee’s appreciation in the interbank must have brought down the price of imported parts or at least diluted the impact in case of the rising price of imported parts but consumers have yet to see any benefit.