KARACHI: Impatient consumers and investors are paying hefty premiums (on money) to dealers to avoid waiting for four to five months to get locally assembled cars delivered.

No locally produced car is available at showrooms for ready spot sales. Either the buyers have to wait for four to five months for delivery or pay extra money to lift the vehicle, dealers said.

An informal market survey reveals that if buyers book Toyota Corolla Xli or Gli models now, they will get the vehicles delivered in July while Toyota Grande and Altis would be delivered by April or May. Premium on Corolla Xli is Rs135,000 while on money on Corolla Gli ranges between Rs170,000-180,000.

Dealers said the first six months of every year remain highly volatile in terms of demand as consumers usually prefer buying new models from January onwards due to change of model year.

Lower interest rates have also lured buyers to go for car financing, jacking up the share of auto financing in total car sales to over 30 per cent from 10-15pc one and a half years back.

Dealers said IMC has been producing over 200 vehicles per day in which Toyota Corolla enjoys the lion’s share.

However, the higher production capacity appears insufficient to cope up with huge demand.

Sources said the delivery time of Honda Civic is August if it is booked now. As a result, buyers are paying Rs150,000-200,000 to dealers to get instant delivery. Some dealers said that premium on Civic has swelled to around Rs250,000 for models which are more in demand.

Those booking Honda City now would get the car keys in May to August depending on the model. The on money on City hovers between Rs100,000-130,000.

Dealers said Honda Atlas Cars is now producing 170 cars per day as compared to 110 four months back but improved production fails to beat burgeoning demand.

The decades-old models of Pak Suzuki are also available on on money due to lengthy delivery time.

The delivery time for Suzuki Mehran is three to four months and dealers are charging Rs40,000-45,000 as premium for ready availability. Similar premium and delivery time exists for Bolan and Ravi.

Premium on Suzuki WagonR is Rs120,000 as its delivery time hovers between five to six months. Surprisingly imported Suzuki Ciaz would be delivered in three months on booking but dealers assure quick delivery to buyers at Rs90,000 on money. Only Suzuki Swift is being delivered in one month’s time.

It is not clear whether the assemblers have artificially created a demand and supply gap despite their production capability or the demand has actually outstripped supplies. The federal government has never taken any action against the manufacturers and dealers on on money business.

Chairman All Pakistan Motor Dealers Association (APMDA), H.M. Shahzad said, “Our used car dealers are not involved in on money business.”

Published in Dawn, March 8th, 2017