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Auto makers likely to cut prices by five percent

ISLAMABAD (May 03 2003) : Car manufacturers and assemblers are likely to cut prices of their automobiles up to 5 percent, an insider told Business Recorder from Karachi.

“We have witnessed three hours' absorbing encounter between the Minister and Pakistan Automobile Manufacturers Association (PAMA) as the representatives of assemblers were not ready to bring down prices,” the insider said.

According to him, the Minister succeeded in his efforts when manufacturers showed flexibility in their stand, saying that they were ready to cut prices without approval from their boards of directors.

Walji, representative of Toyota Company, and Suzuki, owner of Suzuki Motors, were not ready to cut prices without approval from Japan, but when the Minister for Industries countered to allow import of reconditioned cars, saying that “Pakistani customers are dear to me,” Walji made a telephone call to Tokyo to inform the head office about the situation on ground and the sentiments of the Minister.

Following instructions from Japan, the representatives of Toyota and Suzuki, who were present in the meeting, promised to cut prices after formal approval from respective boards of directors.

The representatives of Pama, the insider said, were of the view that if they announce reduction in prices immediately, the booking of cars would be affected. However, the Minister argued that when they would slash the rates, definitely their sales would increase.

Jatoi also said that the profit of a few companies had increased as a result of double shift, which must be shared with the customers, in addition to early delivery of cars, the insider said, and added that the car manufacturers and assemblers promised to come up with a formula before June 1, which would include cut in prices and delivery time.

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