Due to an unusual increase in freight charges, rising tariff rates, and dollar prices as well as Mitsubishi Motors Corporation raising the prices of its vehicles, the prices of cars imported by Pragoti Industries (PIL) increased by as much as 54 per cent.
Before the price hike, each unit of Pajero Sport QX and Pajero Sport QX20MY models sold for Tk 84 lakh. Now the prices have gone up to Tk 1.45 crore for both models.
Similarly, the price of Mitsubishi L-200 Double Cabin Pickup went up from Tk 49 lakh to Tk 55 lakh. The price of Mitsubishi ASXSSUV went up from Tk 57 lakh to Tk 63 lakh.
Pragoti Industries imports 2001-3000 cc Jeep and Double Cabin Pickups in Completely Knocked Down (CKD) condition from Mitsubishi Motors Corporation of Japan and Thailand and assembles them at its own factory. Besides, it also imports and markets cars with a capacity of less than 2000 cc in Completely Built-Up Unit (CBU) condition.
For the financial year 2022-23, the duty rate was increased by 50 per cent on the imports of CKD vehicles with 2001-3000 cc capacity. Altogether, the Total Tax Incidence (TTI) has increased by 73.6 per cent.
TTI increased from 199.40 per cent to 273 per cent due to freight charges being $1,500 per unit, the value of taka being 93-94 per dollar instead of 84-85, and a 50 per cent increase in customs tax in the national budget.
In addition, the Covid-19 pandemic caused a global container shortage, which prompted an unusual freight charge hike and consequently, Mitsubishi also hiked the prices of their cars. Taking all these issues into consideration, Pragoti Industries has decided to increase the prices of their imported cars.
On June 30, Pragoti sent a price adjustment proposal to Bangladesh Steel and Engineering Corporation (BSEC) so that it can be sent to the Ministry of Finance through the Ministry of Industries.
The BSEC on August 4 requested the Ministry of Industries to put the proposal forward to the Ministry of Finance. After completing the formalities, the prices of the cars were increased.
“The increased prices have already come into effect,” Pragoti’s Dhaka sales centre in-charge Saidur Rahman told The Business Post.
“Considering several factors, such as an increase in duty rate in the budget, an increase in freight charge, an increase in the value of the dollar against the local currency, etc, there was no alternative to increasing the prices,” Pragoti’s Managing Director Md Akhtar Hossain said.
He added that the price hike has been approved at the company’s 325th (2nd/2022) board meeting. According to Pragoti Industries sources, the prices of the vehicles may keep fluctuating until the price of USD stabilises and the container shortage subsides.
Meanwhile, another source said that Mitsubishi Bangladesh agent Kokusai Links (KLC) sent a letter to Pragoti on January 31, asking it to increase the shipping charge to $7,000. Moreover, if shipping charges increase further, it would not be possible to supply cars in the future, the letter added.