Last year was one of the worst for the automobile industry. The situation seems even worse as many brands have increased prices and suspended bookings of their vehicles. This time, Road Prince has suspended the bookings of its motorcycles.
Recently, Suzuki also suspended bookings for its motorcycles in Pakistan and then increased their prices. As per this trend, we can suspect that the prices of Road Prince bikes may go up in the coming days.
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There is another factor which indicates that the prices will go up. It is a significant increase in USD to PKR rate. An increase in the dollar rate is also a major reason behind this suspension as the company has mentioned this reason in its circular.
Also, the company has mentioned the insufficient raw materials supplies (apparently due to the Letter of Credit issue in Pakistan). Due to this issue, several car companies had also shut down their production plants recently. This issue may be resolved soon as the State Bank has eased some import restrictions (mentioned in the report).
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Road Prince bike sales declined significantly in 2022 compared to 2021. Its market share also dropped compared to others mentioned in the graph below. It was due to the frequent price hikes last year. Due to this, many started buying used Road Prince bikes instead of new ones. If the situation continues, the company’s sales may decline this year as well.
The signs are not good for the automobile industry. Unstable political and economic situations are impacting many industries. Even after the company has stopped taking further bookings from dealers, you may be able to buy the bikes available in the local dealerships. This type of suspension mostly increases prices later on. Road Prince bikes are mostly bought by low to medium-income people. This news shows that low-income people are finding it difficult to buy new bikes these days.
Do you think that the companies could make the production more localized after years of generating revenue in the country to prevent these types of issues? Tell us in the comment section below.
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