KARACHI, May 10: Certain car dealers are still charging premiums on new cars despite improved supplies as a result

of increase in production in April.

Assemblers said the issue of premiums has emerged due to car bookings made by unauthorized dealers and investors who then sell these cars charging extra amount from those buyers who are in hurry to obtain vehicles.

Used car dealers say that actually the authorized dealers, in connivance with the assemblers, have been squeezing the buyers since the last two to three months by charging premiums on new models ranging from Rs100,000 to Rs300,000.

Indus Motors, makers of Toyota Corolla, produced 700 cars in April, touching sales up to 723 units. The company produced 390 cars as compared to 52 models in February. In March, 260 Corollas were sold as against 40 in February.

A total of 415 units of Honda Civic were rolled out from the plant with sales reaching to 490 units in April. Civic production surged to 405 units in March as against 375 units in February. Total sales in March stood at 364 units as compared to 335 units in February.

Similarly, Honda City production last month stood at 342 units as against sales of 320 units. A total of 258 Honda City were rolled out in March as compared to 126 units in February while sales reached to 241 in last month as against 181 in February.

Suzuki Baleno production peaked to 124 units in April as against 130 units sold in same month. In March, 149 units were produced out of which 100 units were sold. In February, 91 units were rolled out in which sales stood at 56 units.

Around 329 units of Alto 1000cc came out from the plant with sales of 274 units in April. In March, production surged to 329 units with sales of 239 units, while in February production recorded at 290 units with sales of 279 units.

Suzuki Cultus production in April was recorded at 457 units with sales of 501 units. A total of 559 units of Cultus were produced in March, while 383 units were sold. In February, 571 units were assembled as against sales of 589 units. Mehran 800cc production registered at 1,102 units as against sales of 1,101 units in April. Mehran’s production peaked to 1,001 units with sales of 1,003 units in March as compared to production of 651 units with sales of 678 units in February.

Used car dealers said if car sales and production have been on the rise since the last one and a half months then why the markets are still facing shortage of cars and consumers continue to face difficulties in getting delivery of their booked motor cars.

An authorized dealer of Toyota said it is difficult to say shortage of cars persist in the market as supplies from the plant has been gradually increasing. The company has also opened fresh bookings and if a car is booked (at 100 per cent down payment) today, it will be delivered in October or November. Presently, deliveries of new models, which were booked in March, are in progress.

The reply of Toyota’s dealer looks a bit surprising as the commerce minister had assured delivery of new cars in three months.

An authorized dealer of Honda said no premium is being charged and buyers will get the new model within two months of the booking date. Suzuki cars are being delivered in 10-15 days.

An assembler attributed this temporary increase in demand of cars to two factors. Increase in the home remittances after September 11, 2001 has resulted in greater liquidity in the market at the same time profitable investment schemes are negligible, therefore, people started to invest in cars. In July-March 2001-2002, $1.4 billion had arrived in home remittance as compared to $788 million in the same period of last fiscal. Secondly, car loan has made purchasing new cars more easier.