Despite an increase in the value of the rupee and a further decrease in thevalue of the dollar, auto assemblers are hesitating to pass on the benefitsto consumers.
According to a reputable newspaper’s report, consumers saw a significantincrease in car prices over the past 16 months due to a decrease in thevalue of the rupee compared to the dollar, resulting in higher costs forimported components and heavy charges for electricity and gas.
However, despite an increase in the interbank rate of the rupee, consumershave yet to see any benefit. According to the report, auto assemblers hadalready imposed immediate price hikes on consumers due to the depreciationof the rupee, causing plants to shut down due to issues with LCs and ashortage of imported components.
The report quotes a senior executive from an automaker who stated thatthere is no possibility of a price reduction in car prices, but they didnot provide a reason for why car prices cannot be reduced despite anincrease in the value of the rupee. Another company’s stance is that theydid not increase prices after the rise in the dollar’s value.
Locally assembled car dealers have also not hinted at any price reductionsin light of a tough business environment, and car sales have declinedcompared to the previous year. It’s worth noting that on September 5th, thedollar had reached Rs. 307.10 in the interbank market, while it iscurrently trading at Rs. 291.76. This means that after reaching its highestlevel, the local currency has depreciated by more than 15 rupees againstthe dollar.
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It’s notable that some companies had increased prices by hundreds ofthousands of rupees after the rise in the dollar’s value, but so far, therehasn’t been any decrease in prices following the increase in the value ofthe rupee.
One official mentioned that if the rupee remains stable below 280 andother factors don’t lead to increased costs, they might consider reducingcar prices. However, another company’s official stated that there is noreduction in prices because there has been a rapid increase in expensessuch as electricity, labor, and other costs.
