According to a letter issued by the company on August 24, 2004 to its dealers, the company has decided to maintain prices as prevalent before August 20, 2004 and has asked the dealers to accept booking on the previous prices.
The Indus Motor Company had revised prices of two models of Corolla and one model of Coure last week by a few thousand rupees after adding a few accessories like Tachometer, MP3 player and seats' fabrics.
The company claims that it has been absorbing increased input cost resulting due to multiple factors in the market. One of the major cost impacts has been brought in by the rising Yen-Rupee parity.
In year 2002, the Yen was being traded at Rs 00.48, which currently is at Rs 00.53. Another factor that impacted the output costs continues to be the volatile steel prices in the world market.
The vendor industry on which the Original Equipment Manufacturers (OEMs) depend for parts and accessories of the vehicles have also increased prices in the past few months.
Sohaib Naseem, a chartered accountant running an investment consultant said that the recent price revision by Toyota was very nominal and price had been maintained since 2002 when the new model of Corolla was launched.
"Going by the audited accounts of the company, I do believe the company, to maintain its profitability, needed to rationalise price structure of its different products as the input costs are increasing".
Interestingly some other manufacturers have also increased prices of their models, but because of the overwhelming popularity of Toyota Corolla in the market whenever the manufacturer makes any move, it is keenly observed, an auto dealer at Jail Road Lahore said.
Sohaib, however, wondered how could the government continue to interfere in the pricing of different products in the market. It will go against the grain of government's investment policy and could send a wrong signal to both local and foreign investors, he opined.