Automakers unveil new models as demand may rise

With entry of new players, auto market has become highly competitive

Usman Hanif April 13, 2019
To support new entrants, the government has taken measures to restrict vehicle imports, which totaled around 70,000 per year earlier. PHOTO: FILE

KARACHI: Despite economic slowdown in Pakistan, four auto players have introduced almost a dozen new models in the market while anticipating a rise in demand in the near future.

Pakistan’s automobile sector is still in the developing stage as the vehicle ownership ratio is just 18 among 1,000 people.

During the Pakistan Auto Show 2019, Pak Suzuki Motor Company, which recently stopped booking for its Mehran model, launched a substitute, Alto 660cc. “Alto is expected to beat sales of Mehran,” said a company official on condition of anonymity.

He added that out of 400 parts, 57% of Alto components were manufactured in the country.

Pak Suzuki Motor stops booking for Mehran

Furthermore, Kia-Lucky Motors showcased Kia Sportage (SUV) and Picanto (1,000cc), which will be available in June and October this year respectively.

Changan Automobile, in partnership with Master Motor Company, launched Karvan (1,000cc), M9 (1,000cc) besides showcasing seven-seat Changan CX70 (1,500cc), which will hit market at the end of this year and A800 (1,500cc), which will be available next year.

Apart from this, Master Motor introduced heavy commercial trucks Foton EST 410 and Iveco.

“Despite the challenges, Pakistan’s automobile industry has shown growth in recent years,” said the CEO of a leading carmaker during the event.

It is pertinent to mention that the auto industry provides jobs to thousands of skilled and unskilled workers across Pakistan.

“Following the entry of new players, the auto market will become highly competitive,” said Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Chairman Ashraf Sheikh while talking to The Express Tribune.

Terming competition a healthy sign, he pointed out that it improved quality, ensured diversity and stabilised prices, “hence consumers benefitted the most.”

He pointed out that new and old players had turned focus to local auto parts rather than imported ones due to massive rupee depreciation against the US dollar - 34% since December 2017.

“When automakers turn towards local parts, it creates new jobs and promotes import substitution,” he said.

“Kia will move towards localisation as soon as it achieves economies of scale,” said Kia CEO Asif Rizvi during the event.

“New players have entered the market with investment worth billions of rupees, hence they are serious about business,” said former Paapam chairman Shariq Suhail in comments to The Express Tribune.

He anticipated that they would come up with different strategies to make their place in the market. “A question remains whether the new players will get business or not as market share of the companies will shrink,” he said.

According to Suhail, immediate demand would come due to the absence of imported vehicles in the market.

Carmakers dismayed by changes in auto policy

To support the new entrants, the government has taken measures to restrict vehicle imports, which totalled around 70,000 per year earlier.

“If the new entrants manage to sell 30,000 to 40,000 vehicles a year, it will be more than enough for them,” said the former Paapam chairman.

With the increase in competition, the production of cars would improve and customers would get vehicles without delay, he said.

Secondly, he continued, service quality would improve as every player would strive to provide good-quality service.

Published in The Express Tribune, April 13th, 2019.

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