Toyota decreasing car prices might poke others to do the same

By now, you guys would already know that Toyota Indus Motors has decreased the prices of its cars. Toyota claims that the company wants to provide relief to its customers since the Pak Rupee has started to appreciate compared to the US Dollar.

Prices of Corolla have dropped from 3.3 to 4.4 lac, Yaris from 2.6 to 3.1 lac, Fortuner from 9.1 lac to 1.1 million, and Revo from 6.5 to 8.2 lac. Albeit the decrease is not as much as the increase was, but at this point, something is better than nothing.

Here are the updated prices of all the Toyota cars in Pakistan after the reduction:

This is something new for a big company to do. There is a trend of increasing the prices as soon as the dollar appreciates but no one reverses it when the rate of the dollar does come back. Previously United did that by decreasing the price of Bravo hatchback by PKR 100,000 back in November of 2020 when the price of the Dollar fell. But for a big company like Toyota, this is a first.

Also, there is a difference between a company like United decreasing prices of its cars, and someone like Indus Motors doing it. When United did that, the company did it to save itself considering no one was buying Bravo in the first place. The company wasn’t selling many cars to begin with, they needed all the help they could get and decreasing price was one of the incentives for the potential customers. But Toyota is the biggest car assembler in Pakistan. They are one of the Big Three in the country. When they do something like this, it has a massive effect on the automotive landscape of the country. Toyota Indus decreasing the prices of cars can act like a domino effect for other companies to do the same. 

Dollar almost touched 250 rupees during this time in the open market. Car companies increased the prices of their products multiple times in these last few months. The prices kept on rising like they were “pyaz tamatar”, and not multiple million rupee vehicles. The situation was super alarming to the point where almost all big companies started having non-production days. Toyota Indus, as you all already know, even started returning people their booking amount since they were unable to secure raw material to assemble cars. Car companies going out of business or having massive layoffs was a real threat. But with Pak Rupee rising a bit (Rs 213 in inter-bank market), and Dollar falling in international market has helped and loosened the noose a bit.

This should prompt other carmakers to lower the prices of their cars as well. The people are already up in arms, as they should be, regarding these abrupt price hikes. Overall sales have already fallen by almost 58pc. The automotive sector badly needs to bring the cars back in the reach of a common man for the industry to survive.

Low sales and dropping profits: Are carmakers in trouble?

By the way, this is not the first time Toyota has done something like to help the end consumer. Back in 2018, Toyota actively cancelled several bookings of potential 3rd party dealers and investors who were booking and buying cars in bulk and then selling them in the open market on premium aka “ON money”. I think it is fair to say Toyota Pakistan is far more conscious of its social responsibility towards its customers than other carmakers.

Will other companies follow suit and give relief to the customers, or will they keep acting like money hungry endless pits that only contribute to the misery of a helpless Pakistani auto consumer? Only time will tell. Until then, let’s hope for the best. 

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