Leading carmakers say that are compelled to stop factory operations for 10 to 15 days a month owing to low car sales in the country. Indus Motor Company’s (IMC’s) Senior General Manager, Sales and Marketing, Ali Asghar Jamali said that his factory operations were shutdown down for 10 days in September, and that the management has planned to reduce production by at least 50% in October, November and December.
IMC is also taking a big hit because the company has discontinued the Diahatsu Cuore, an economy segment car whose market is being taken over by similar imported used cars.
During the first quarter of the current fiscal year, Indus Motor’s sales have declined to 8,299 units, down 35% compared to last year. Its flagship model Corolla’s sales are down 34% to 7,032 units, as against 10,682 units in the same period last year.
The decline in sales of the Corolla is a big setback for the IMC: right now, the company has over 3,000 new cars in its inventory owing to slow demand, an official of the company said.
The declining trend in sales continued in September for the IMC: sales for the month declined by a massive 31% to 2,120 units, versus 3,092 units in August.
Topline Securities on Wednesday said that the subdued sale of local cars is because of the termination of the Diahatsu Coure and the Suzuki Alto, and due to a large inflow of imported cars.
Sales of locally assembled sales declined to 30,541 units during the first quarter of fiscal year 2013 (1QFY13) – down 30% compared to 43,694 units in the same period last year, the report said.
Amongst individual companies, Pak Suzuki sales during 1QFY13 declined by 33% to 17,659 units, as against 26,415 units sold in the same period last year. However, car sales stood stagnant at 6,042 units in September compared to last month. However, sales were down 26% from the same period last year. However, an official from Honda Motors said the company is in full production because of good response on its new Civic 2012 model.
Car importers, who are blamed for the present difficulties of local carmakers, have a different story to tell. Chairman All Pakistan Motors Dealers Association (APMDA) HM Shahzad said that the low sales of local cars are not because of the surge in sales of used cars, but because of the high prices of local cars. “Sales of used cars were almost the same in September if compared to the month of August 2012,” he said.
“Pakistan is importing 3,000 to 4,000 used cars a month, which is not enough to affect sales of new cars,” he claimed.
Published in The Express Tribune, October 11th, 2012.
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Good. The car makers should go out of business if they carry on with their policies of under-delivering and over-pricing. Compete or perish.
Do any you have any idea about the amount of goverment taxes build in to the car price ?
Local car prices is tooo high. With the features they provide, even half the price is much for them. I bought japanse 660 CC imported car just because the local prices are too hight plus i cannot waste my time to be in queue for hours because of CNG.
BOTTOM LINE: Local dealers should cut their prices and increase their quality. I wish adam revo comes again with much price, government should avail this golden oppurtunity to produce "made in paksitan" car!!!!!!!!!
I think that car manufacturers need to explore more innovative options to regain sales...reaching out to the customer..provide better after sales service..give better options in the car whilst ordering...paying more attention to quality..etc
keep the price of locally manufactured cars compatible to the quality (lower as compared with imported used cars) and see the boost in sales.
Crying wolf i would say, If you cant compete with 5 years old cars then you must be doing something wrong. Why a local assembled car is more expensive even we compare with indian assembled car, plus they fail to pass on the saving for local assembling with cheap labour compared to Japan.
Cars assembled in Pakistan are of low standard even compared to a 5 year old cars, they offer low value for money. Local assemblers also fail to introduce cheaper models for lower price segments, those consumers will have no choice but to go for cheaper imported cars.
To survive and win, they should brought smaller cars that appeal to people, Toyota also make Aygo, Yaris/Vitz, and Honda also make Jazz etc Suzuki also make 660CC cars! But i guess local assemblers only interested in upper middle class range cars that are out of reach of most people in Pakistan. They have also failed to bring hybrid options when its freely available around the world!
Sooner you wake up from monopoly dream, the better. Thats how the free market works. Pakistan should also invite other quality and budget car makers to the country, ie Ford, VW, Fiat, Renault etc to create a healthy environment. Bottom line, if you produce better cars locally, why would people force to go for a used option?
I truly wish that local car manufacturing industry should bear more losses as they are giving piece of junk at such sky rocketing prices. Prices of local cars are completely unjustifiable. I request govt to further reduce duties on imported cars so that people should enjoy luxury driving and avoid going for locally manufactured cars.
If only the local manufacturers would focus on selling cheaper, better cars to the public than to lobby against imported cars. The Rs. 0.8 Million Alto and similarly priced Coure, are pathetic automobiles considering their prices. But it seems the manufacturers have been spending their energies just to keep the competition out - hopefully the current state of affairs would push them to be more consumer-centric.
What does it say about the local industry when the local industry's brand new cars cannot compete with 5 year old imports? To put it in very simple every day language, these locally manufactured cars are sub standard, expensive and consumers have no appetite for these any more. The government has been protecting the local industry for at least 3 decades and the result is, consumers prefer 5 year old imports!