KARACHI, March 16: Local assemblers have finally geared up their production to meet the rising demand of cars from the buyers, but the market may witness shortage for few more months because of lengthy period of delivery.

The Ministry of Industries and Production also asked the assemblers few days back to roll out maximum number of cars in order to overcome the rising demand. Manufacturers were asked to check with their dealers for charging hectic premium on new models.

Assemblers, including Honda and Pak Suzuki have started assembling 100 to 300 more cars per month as compared to their monthly production to meet the sudden demand spurt.

However, Indus Motors, which launched the new Toyota Corolla on February 14, is currently producing 450 units per month and intends to reach the regular level of 850 units per month shortly.

A senior executive in Indus Motors said the company could not jack up its production overnight as the supply of local parts from the vendors would take some time. The new Corolla has 52 per cent local components.

However, a body of used car dealers — All Pakistan Motor Dealers Association (APMDA) — in a letter to Commerce Minister Razak Dawood on March 14, again pointed out that the situation of charging premium on cars by the dealers has further deteriorated.

APMDA president H.M Shahzad informed the minister that the booking papers of Corolla XLI, which has been booked up to April 2003, are being sold in the market at the premium of Rs250,000 in connivance with its dealers. The commerce minister, two weeks back, had cautioned the assemblers that the government would liberalize import of used cars if they failed to meet the rising demand of cars.

Toyota is being booked at 100 per cent payment in place of 20- 25 per cent down payment. As a result of sky-rocketing prices, coupled with higher premium, genuine buyers are literally being deprived of to own a new car, he said.

Showroom officials of Indus Motors give a mix picture of car delivery schedule. Some dealers say that the 1300cc petrol car will be delivered by February 2003 or April 2003, while some give dates for October this year. However, diesel version will be delivered in September this year, while some assured of giving delivery in August 2002.

Market sources said the premium on Toyota Corolla now ranged between Rs170,000 and Rs190,000 per car and in some cases it is being demanded at Rs200,000.

Dealers of Honda said the new car would be delivered in October if it was booked these days. Sources said the premium on Honda 1600cc model ranged between Rs100,000 and Rs125,000.

A dealer of Pak Suzuki said that the if Mehran 800cc was booked these days, it would be delivered in July, while buyers could get Alto 1000cc in just 12-15 days. Baleno’s delivery is scheduled in May/June while Cultus will be delivered in 15 days.

Market sources said the premium was charged on ready stocks. The premium for Baleno is Rs30,000-Rs35,000 and on Mehran it ranges between Rs30,000 and Rs31,000. Dealers are charging premium of Rs5,000-Rs6,000 on Alto 1000cc and Cultus 1000cc.

Auto assemblers linked the surging demand of cars to the introduction of new models coupled with attractive package being offered by the leasing companies and a number of banks on car financing.

They said that car sales and production had been affected after September 11 incidents, but the scenario had now changed in the last two months, resulting in flaring up of demand.

In the last one month, the car market has seen many developments. Dealers and even some assemblers now say that the market is now flooded with bookings owing to presence of “investors and speculators.”

“Around three to five cars are being booked by investors, at full 100 per cent payment,” dealers said. They said even the buyers are ready to pay Rs200,000-Rs300,000 more (premium) to get the immediate delivery of new Corolla 1300cc cars, which are meant for only display purpose at various showrooms.

Investors, usually seen cashing their luck in the stock market, gold, dollars and real estates, have now entered in the auto market. Except for gold, investors are quite active in real estate because of price flare-up in posh areas followed by their renewed interest in the stock market in the last few months. However, they have lost their hope in the US dollars since its losing strength against the Pak rupee.

The arrival of home remittance from Saudi Arabia, the United Kingdom, the US, Bahrain and the UAE since July-February 2001- 2002 stood at $1.1631 billion which is quite high as Pakistanis used to send around one billion dollars in a year. People are cashing this amount in rupee and trying to save their capital by investing in various sectors. To some extent, auto sector has also attracted them.