Demand for high-end vehicles soars after easing of curbs

Travellers buying SUVs to explore country owing to global travel restrictions

Demand for high-end vehicles has surged in Pakistan following a worldwide lockdown imposed to contain the coronavirus pandemic.

In an interview with The Express Tribune, Indus Motor Company (IMC) CEO Ali Asghar Jamali said the company was getting monthly orders for 600 units of Toyota Fortuner since the Covid-19 lockdown was lifted compared to orders for just 100 units per month before the lockdown.

He added that following the spike in demand, the company had been working on double shift to produce 400 to 500 Fortuners per month. "This demand is, however, short term and will not persist for long," the CEO said.

He elaborated that most of the demand was stemming from families which used to travel internationally before the Covid-19 outbreak and spend an amount equivalent to the cost of a sport utility vehicle (SUV).

"Now, such families are travelling within the country, particularly to northern areas, hence they are buying the SUV and visiting the upcountry in the vehicle," he said.

The lockdown, imposed in Pakistan to combat Covid-19, hit the auto sector hard as the three major carmakers recorded zero sales in April, a historic low in Pakistan's history, followed by sharply lower sales in May and June.

Demand for automobiles had bounced back by about 25% and fiscal year 2020-21 would record sales of 200,000 passenger cars, predicted the CEO.

Keeping in view the demand, the company doubled its work shift in June and hired 600 new employees in August and September, he said.

The rebound in demand for passenger cars came in the wake of three major factors ie, demand stemming from tourism, pent-up demand and natural demand.

Pakistan is a market for 250,000 cars annually, which plunged 53% to 110,583 units in previous fiscal year 2019-20 owing to a slowdown in economic activity, high interest rate and Covid-19 outbreak.

"The government is working to expand the auto sector by reducing taxes to create job opportunities," said Jamali.

He pointed out that government officials would meet auto assemblers in December to discuss the new auto policy as it was considering slashing taxes such as the federal excise duty in order to increase the number of passenger cars in the country.

Indonesia has a population of 273 million and it has recorded sales of around 1 million cars per year in the last 10 years while Pakistan has a population of 207 million, therefore, experts suggest that its car sales can more than double in a few years.

Published in The Express Tribune, October 30^th, 2020.

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