Monthly AutoMark Magazine
Introduction of new models of 800cc will help the assemblers to improve their profits besides eroding share of imported used cars. If the government is looking forward for new entrants in bike assembling then it is high time to encourage new entrants of Europe, China and Korea through tax incentives which would also break the monopoly of current Japanese player. Honda Civic and City sales swelled to 9,950 and 11,285 units as compared to 4,977 and 7,142 units while Toyota Corolla, Suzuki Swift and Suzuki Liana sales dropped to 32,608, 6,096 and 164 units as compared to 46,207, 7,040 and 450 units respectively. Suzuki Cultus, Suzuki Mehran and Suzuki Mehran sales plunged to 13,308, 32,407 and 12,941 units as compared to 13,693, 35,131 and 22,540 units respectively. Completion of Punjab taxi scheme and price increase were the main reasons of causing dent to sales of Suzuki Mehran and Suzuki Mehran. On the contrary, only 26,525 units of used cars up to 1,000cc landed in Pakistan in 2012-2013. The reduction in age limit of used cars to three from five years besides cut in depreciation emerged the main reasons of drop in arrival of used cars. If the local industry would have been able to provide quality cars at affordable prices then the section of “Letters to the Editor� pages of various newspapers, where people share their personal experience, would have not been loaded with criticism on the local car industry for minting money and operating as a cartel. Many people feel that why a buyer pays his hard-earned money to buy costly
overall sales of locally produced cars in the country fell to 118,830 units in July-June 2012-2013 as compared to 157,325 units in the same period last fiscal year. Only Honda Civic and Honda City cars emerged successful in luring buyers at a time when Toyota Corolla, Suzuki Swift and Suzuki Liana sales plunged.
locally produced small engine power old designed car which got a new engine of Euro II last year after a gap of over 20 years, while imported used cars were having Euro III and Euro IV engines with power steering and windows, air bags, safety features, new designs etc. Car makers try to take edge over the used imported cars by comparing the resale value, easy parts availability and fuel efficiency of locally produced vehicle but they skip comparing their vehicles in areas like quality, designs, safety features, etc. Even imported cars undergo crash test results which everybody is sure that this important aspect is ignored by the local assemblers. Due to lack of any presence of new entrants in car segment, assemblers especially Pak Suzuki knows that they will keep selling their cars till the people continue to buy. Arrival of non Japanese assemblers may force the existing car assemblers to reduce prices or at least improve quality, otherwise changes are slim to see big change in small locally produced car. The assemblers must now realize that what buyers want in their cars when they look other dashing and stylish used imported cars. It is to be seen how the PML-N government takes the issue of dwindling option in small car segment besides the concerned assemblers’ practice of fleecing consumers on old models and engines. Otherwise, people feel that there is really no difference between PML-N and PPP government. People feel that why the Japanese assemblers do not realize that if millions of dollars are spent on importing used cars then it means that a big market exists for the local assemblers to cash it. Introduction of new models of 800cc will help the assemblers to improve their profits besides eroding share of imported used cars. If the government is looking forward for
new entrants in bike assembling then it is high time to encourage new entrants of Europe, China and Korea through tax incentives which would also break the monopoly of current Japanese player. The figures of 2012-2013 used car imports along with previous years, which suggest that the buyers definitely need good quality cars with all features. Car dealers say that the government should realize that import of small cars holds lion’s share in total imports mainly 660cc engine power cars which are very light on fuel and give as much as 18-20 km per litre of petrol. It means that the buyers do not need a CNG kit and cylinder in his car. Even Hybrid cars do not give such good mileage. In July-June 2011-2012, the share of cars up to 1,000cc was 24,530 units. There is no issue of finding parts of imported used cars as the importers have loaded the markets with parts due to rising volume of used car imports in the last few years. However, with the volume of imports are on the decline, consumers may face problems in getting parts easily in the markets. Overall imports of used cars up to 1,000cc stood at 26,526 units in 20122013. However, the number of imports had started declining since the PPPcoalition government reduced the age limit of used cars to three from five years coupled with reduction in depreciation allowance in last months in power. The local car industry especially the maker of Suzuki Mehran must be happy now in view of receding volume of imports of used cars after government’s decision. The assemblers are not in a hurry to bring any alternative of Alto and Cuore saying it is difficult to bring Cuore or 800cc car which costs $10,000-12,000 in world markets. Bringing these cars into local assembly would not prove financially feasible for the companies and it will cost more to the buyers, the assemblers said.....
www.automark.pk | August-2013 | Page 21