Overview: Demand for cars grows, but choices still limited

Suzuki and Toyota neck and neck for the top spot in Pakistan.

KARACHI:

The automobile industry is one of the most underdeveloped segments of the industrial sector in Pakistan. In fact, it has still not been able to progress from assembling to manufacturing. Despite a massive surge in car ownership as a result of financing options and lower duties the local car manufacturing outlook is not good. However, the growth of car leasing has led to one or two subsidiary impacts, the first of these is the growth of local assemblies for imported vehicles. The other is the profusion parts manufacturers in the local market.

But with limited financing options available for second hand cars in Pakistan, it is not surprising that 79% pay cash upfront while making a purchase.

As a result of this survey conducted by Pakwheels.com and YouGov many important numbers have come to the fore. A picture has emerged suggesting the tendency to insure cars or not, the use of driving licences, and what aspects are important to buyers. These include fuel efficiency, drive quality and accessories as well as brand recognition.

The focus on factors such as brand awareness and ownership, current car driven or used more often, insurance and ancillary industries, brand perceptions and which car, those taking part in the survey would like to buy made for very interesting reading.

Out of the total respondents 94.40% were car owners. Japanese car brands topped the awareness chart with Suzuki (90%), Toyota (89%) and Honda (85%) leading the rest.

Japanese car brands top the brand awareness chart but are also unsurprisingly the most owned vehicles in the country with 52% of the respondents claiming to own a Suzuki, followed by Toyota and Honda at 40% and 35% respectively. These three Japanese brands hold 82% of the current market share in Pakistan. For 70% of respondents the determining factor when choosing a car brand was price, with reliability coming a close second. Performance is a low determination factor with regard to Japanese brands. In this regard, Suzuki beat out Toyota by a small margin because of price, though both scored well in terms of reliability and durability, with Toyota coming in a just ahead on the former. Toyota tops brand perception while Honda is rated as the brand offering unique features and has consistently high quality.

One of the most astonishing fact that one comes across in this research is the fact that 65% of respondents had bought second-hand cars with one in every four claiming to have paid less than Rs500,000 for the car they drive or use most often.

The real essence of the survey lies in the shocking revelation that 78% of the respondents are on the road without any kind of insurance. And an equally high propensity for people to be on the roads without a drivers license.

The survey also provides an insight into unique stats such as 38% of the respondents were not aware of any sort of car tracking system. Car tracking companies really do need to work a lot on creating awareness of their products.

Going through the stats one can easily conclude and no surprise here that Japanese cars (Suzuki, Toyota and Honda) are currently the most favoured cars for the Pakistani automobile buyer. Car purchase especially purchasing a second hand car in Pakistan is driven by economic factors such as fuel efficiency and value for money but factors such as environment friendliness are not as important to the Pakistani buyer as of now.

Published in The Express Tribune, September 10^th, 2012.