Can car prices and quality improve next year in Pakistan?

"The middle class and working class people are no longer buying new cars, they are selling their used cars so that they can make some m...

"The middle class and working class people are no longer buying new cars, they are selling their used cars so that they can make some money immediately."

Hira Nazir is the product head of Car First, a used car buying and selling website in Pakistan. According to him, the business of old vehicles along with new vehicles has also been severely affected in Pakistan during the global epidemic.

The country has seen a steady rise in car prices this year, and the idea of ​​buying a new car for the middle class seems to have been limited to an advertisement.

According to Asim Ayaz, a spokesman for the Engineering Development Board, a subsidiary of the Ministry of Industry and Production, the Pakistani government cannot control car prices because prices are determined by market factors, such as the value of the dollar, taxes, duties and localization.

"About one-third of the retail price of new vehicles in Pakistan is taxable and companies determine the price of their vehicles accordingly," he says.

According to the Pakistan Automotive Manufacturers Association (PAMA), a representative body of automobile manufacturers, sales of vehicles of 1000 cc and above increased from July to October this year as compared to last year, while sales of new small vehicles declined during the same period. Is.

One thing is clear from this that the dream of middle class people in Pakistan to buy their own 'family car' is just a dream.

At present it is not possible to buy a new car in Pakistan for less than Rs 1 million.

In terms of locally manufactured vehicles, only three Suzuki Alto, Prince Pearl and United Bravo are available for less than Rs 1.5 million.

According to Asim, car prices may be lower than the competition between the 'Big Three' (Suzuki, Toyota and Honda) and new companies in Pakistan. He cites the example of United, which is probably the only company in recent history to have lowered the price of its Bravo car in the face of a falling dollar.

He adds that in India, for example, Maruti cars are cheaper because of the high rate of localization and demand, while most parts are imported from Pakistan.

Some business organizations even call the big car companies here 'car mafia' and call them 'assemblers' instead of manufacturers.

According to Hira, an affiliate of online car company Car First, the used car business remained closed in lockdown. But later, when the prices of new cars went up, more and more people turned to used cars.

She says the business of used cars in Pakistan has grown significantly this year compared to last year. His company's business has grown by 25% every month.

Most Pakistanis resort to traditional showrooms to buy or sell used cars, but many online methods have now been introduced. Car First is one of the companies that has been established in Pakistan since 2016 but due to the restrictions imposed during Code 19, relatively more people chose to buy or sell used cars through them.

"The business of used cars in Pakistan has grown since June," says Hira. This was the time when efforts were being made to move towards economic recovery after the lockdown.

According to him, his company has been buying and selling more used vehicles since August this year than last year, which clearly shows that people are being limited to used vehicles instead of buying new ones.

When asked why this happened, he replied that many people needed money immediately because of possible economic hardship, so they sold their cars.

"People who used to buy new cars are now buying used cars because prices have gone up so much.

"Especially middle class and working class people can no longer afford to buy new cars ... Instead, they are now selling their used cars so that some money can be managed immediately.

According to him, some people try to find an easy alternative in difficult situations, that is, they wanted to avoid the big expense of buying a new car or to make money by selling their old one immediately.

Customers and mechanics in small and large auto markets often complain that the prices of cars made in Pakistan are too high in terms of quality. According to many motor mechanics, the sheets used in cars are thinner, the paint is defective and the engine is less durable than in the past.

A trend called 'Car Mafia' has also gone viral on social media in recent days in which an attempt has been made to prove that the car industry in Pakistan is in the hands of only a few profiteers by apparently targeting the 'Big Three'.

An attempt was made to contact Pama by email but no reply was received.

Rejecting this impression, Asim Ayaz says that new car companies have become active in the country, as evidenced by the public in the form of new vehicles. He believes that now the competition will be on price and quality.

He acknowledged that in the past, there were no rules regarding the quality of vehicles, such as the requirement for airbags for road safety, which would be considered in future auto policies. According to him, modern technology keeps the weight of vehicles low so that their mileage and performance can be improved.

It may be recalled that the Minister of Science and Technology Fawad Chaudhry had announced last August that the required standards have been prepared for vehicles manufactured in Pakistan. The quality of vehicles in Pakistan is monitored by the Pakistan Standards and Quality Control Authority, a subsidiary of his ministry.

According to a spokesman for the Engineering Development Board, the new vehicles being manufactured in Pakistan are now basically meeting certain standards, but their features may be different from other countries.

To a question, Asim Ayaz said that car prices in the country will come down next year only if the economy is stable, a clear fall in the value of the dollar, localization in the domestic industry after the global corona virus outbreak. And more vehicles are introduced.

However, in the current situation, car dealers are not so optimistic. He emphasized the need to focus on tax evasion and the availability of imported vehicles.

Next year, a 1300 cc and 1500 cc car from Master Motors is also going to be introduced, which is estimated to cost Rs 2 million to Rs 2.5 million. According to the company, they will offer this local car as a better alternative in the country.

Asim Ayaz of the Engineering Development Board says the EV policy for electric vehicles will also be approved next year.


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