In a country where car price hike is common and decrease is unheard of, Toyota IMC surprised everyone – they decreased the prices of their entire CKD lot. Suzuki was quick to follow, then came the price decrease from Honda, United, Changan and others. However, the two top auto manufacturers from South Korea have refused to decrease their prices.
While it was expected that they would too, as they had increased their prices with a strengthening US Dollar, it is worth looking into their reasons for not jumping on the bandwagon.
Why Are KIA and Hyundai Not Decreasing Their Prices?
In a press release dated 18 August 2022, KIA gave its reasons for not decreasing the prices of their vehicles.
In short, what the company is claiming is that they absorbed some of the price increase shock and didn’t pass it onto its customers’ lock, stock, and barrel unlike its local competitors. And therefore, it is under no obligation to do what its competitors are doing now.
Is KIA Telling the Truth?
Unlike their local competitors which operate on a complete Just in Time (JIT) model, KIA has a reserve stock of its vehicles. This is why, their delivery time is lower and the ON money on KIA cars is also lower.
This is their current car delivery estimated time:
| Model-Variant | Delivery Time |
| Picanto MT | August 2022 |
| Sportage Alpha | August 2022 |
| Sorento 2.4 FWD | August 2022 |
| Sorento 2.4 AWD | August 2022 |
| Sorento 3.5 FWD | August 2022 |
| Stonic Ex | August 2022 |
| Stonic Ex+ | August 2022 |
| Sportage FWD | September 2022 |
| Sportage AWD | October 2022 |
| Picanto Auto | Booking Closed |
However, not following the industry norm leaves KIA more vulnerable to Pakistani Rupee appreciation and depreciation than its competitors.
This is why when the PKR started to depreciate against the US Dollar, KIAs auto manufacturing cost immediately increased, prompting them to stop taking bookings for its various models.
As their competitors operate completely on the JIT model, they have higher lead time in which if the Rupee strengthens against the US Dollar, they can reduce their prices as the cost of manufacturing goes down.
Why Hyundai Isn’t Decreasing Prices of Its Cars?
Unlike KIA, Hyundai’s reason is very simple and here it is – the company never raised the prices of its vehicles very much to begin with and hence does not feel the need to reduce them now. To support their claim, they quote these numbers:
| Hyundai Price Increase | Competitors Price Increase |
| 13% | 22-24% |
The company further claims that even with the recent price decrease, Hyundai car prices are still competitive in the market.
This claim certainly carries weight when you compare Hyundai Elantra with its local competitors like Honda Civic and Toyota Corolla Grande.
To read more on their comparison, click on Elantra Vs Grande Vs Civic: The Most Value for Money Sedan?
Though the claim sounds hollow when you compare the price of Hyundai Tucson with its two main local competitors – KIA Sportage and MG HS. The Tucson is more expensive than the Sportage, while it is cheaper than the MG HS.
Were you expecting these two to decrease their car prices? Now that they aren’t, will this change your buying decision? Are you more inclined towards buying used Hyundai and used KIA cars? Let us know.
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