As demand picks up, so does Suzuki Wagon R’s price

Pak Suzuki Motor has increased prices thrice in past nine months

KARACHI: After a long wait of over two and a half years, Suzuki Wagon R - Pak Suzuki Motor’s latest model in its range - is finally showing encouraging signs with demand picking up pace.

Sensing the continuation in the hatchback’s demand, the company has gradually started increasing its prices which it had to reduce earlier due to a poor response.



Suzuki Wagon R was launched in April 2014, but after the initial few months, its sales dropped dramatically, forcing the company to produce just 17 and 20 cars in November and December 2014.



Soon after, the company massively revised prices of Wagon R along with other vehicles. For Wagon R’s cheapest variant, the price was cut by Rs50,000, or 5.6%, to Rs849,000.

For other variants, prices were reduced by Rs90,000, or 8.56%, to Rs959,000 and by 8.25% to Rs999,000.

However since then, Wagon R sales have shown a steady growth. Sales in the first financial year stood at 5,246 units. In the second year, they jumped to 9,709 units, up 85%.

Similarly, sales rose 84% to 6,183 units in Jul-Nov 2016 compared with 3,362 units in the same period of previous year.

The increase in demand has also sparked repeated revisions in the car prices. Only in the past nine months, Pak Suzuki Motor has increased Wagon R prices three times.



It first raised prices in April 2016, then in August 2016 and the last increase came in January 2017 when prices of the top two variants were increased by Rs20,000.

According to dealers, the current price of the basic variant is Rs859,000 while the prices of top two variants are Rs1,049,000 and Rs1,089,000 respectively.

“Wagon R is in loss which is why we have increased its prices,” Pak Suzuki Motor spokesperson told The Express Tribune.

However, he quickly added that it should be kept in mind that the company had earlier reduced Wagon R’s prices massively.



After the discontinuation of Suzuki Alto and Daihatsu Cuore on June 30, 2012, Wagon R was the first locally assembled car in Pakistan in the 1,000cc or below engine category.

After its launch, some analyst had shown faith in the car because there had been no competition in the 1,000cc category. In line with their expectations, Wagon R sales picked up in later months.

“There is no competition in the market, Wagon R is the only small car in its category that is being produced in the country,” Sherman Securities analyst Sadiq Samin commented.

Analysts say lack of competition is helping the model more than its appeal to the customers.

Samin agreed with the company’s spokesperson that Wagon R was not a very profitable product for Pak Suzuki compared with other models. “Pak Suzuki’s margins in Wagon R are low which is why the company is increasing its prices,” he added.

Published in The Express Tribune, January 5^th, 2017.

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