• Struggling to offload cars, Chinese and Korean firms offer attractive packages, discounts
• No change for Toyota, Honda and Suzuki; Audi prices fall on expiry of SRO
KARACHI: Increase in interest rates, curbs on auto financing and the prevailing political and economic uncertainty have proven to be more turbulent for Korean and Chinese auto assemblers than their Japanese counterparts and are offering price cuts, and various packages to attract customers.
From fringe benefits like free registration to a massive cut in service charges and a ‘ready delivery’ option, Korean and Chinese companies are ready to offer it all, while no such moves are being made by Japanese assemblers.
Instead, the Indus Motor Company (IMC) recently raised prices by Rs190,000-700,000, showing high demand for their vehicles, even with an extended delivery time.
Moreover, all dealers Dawn spoke to rule out the imposition of any ‘own money’ or premium on vehicles being sold currently, owing to depressed demand.
For example, Kia Lucky Motors has slashed the price of different models of Kia Sportage by Rs101,000-251,000 during October, while the company is now offering a 40pc discount on after-sales services, with a free pick-and-drop service available to those who want to take their vehicles for maintenance between Nov 20 and 30.
The automatic transmission Kia Picanto is currently being delivered within a month on full payment, while the manual model is ready for immediate delivery upon complete payment.
Meanwhile, the Stonic and Sportage models are ready for delivery on full payment, while bookings of the Sorento 2.4FWD model are temporarily suspended but the 2.4 AWD and 3.5FWD models are readily available. Partial bookings are also being made on the Carnival GLS Plus, which has a delivery date of Feb 2023.
A Kia dealer told Dawn that people are asking them to resume the Rs101,000-251,000 discount on different models, but the company has no plans to do so.
A dealer from Hyundai Nishat Motors said that free registration is being offered on the Hyundai Tucson AWD until Dec 31, which translates to a rebate of Rs200,000.
“This benefit can be called a package or price discount for buyers, given the current lull prevailing in the auto market,” he added.
On the other hand, a Toyota dealer said that the delivery time for a Yaris hovered between 30-45 days, while the wait for various Fortuner models was two to four months. The Hilux Revo, however, is being handed over to customers who make full payment within a fortnight. Customers can also get the keys of a brand-new Toyota Corolla within two to four months, in case they book the vehicles today.
But Toyota is offering no discounts or incentives.
Similarly, a Honda vehicle dealer said that consumers would get delivery of Honda City models within 30-60 days, while those who booked immediately could walk away with a BR-V on the same day. Those who need extra patience are buyers of the Honda Civic and the newly-launched HR-V, as they will have to wait until July 2023.
Prince DFSK CEO Sohail Usman said his company had cut the price of the Prince Pearl 800cc by Rs200,000 to Rs1.5 million, followed by a Rs300,000 drop on Glory DFSK SUV, which now costs Rs5.8m. The new rates are effective until Dec 31 and these vehicles are supposed to be delivered in 30 days.
“We are attracting cash buyers; the auto market has more of them than those who opt for auto financing through banks,” he said, adding that bookings were on the decline in the wake of the State Bank’s decisions to rein in auto financing, raise interest rates and protect the vulnerable exchange rate.
He said the share of bank leased vehicles in their total sales figures has plunged from 30-40 pc to five to 10pc.
On the quota imposed by the State Bank of Pakistan in opening letters of credit for imported parts, Mr Usman claimed the central bank was favoring big Japanese players instead of other players.
He was also apprehensive of the hike in interest rates, fearing that this could lead to a rise in customers who default on their installments.
Shafiq Ahmed Shaikh, head of public relations for the Pak Suzuki Motor Company Ltd (PSMCL), told Dawn that all Suzuki models would be delivered within two to three weeks if bookings are made until Dec 31, while some models would take four to five weeks to arrive. Next year, however, the delivery time would depend on the availability of funds for imports.
In the current atmosphere, he added, PSMCL is already offering different incentive schemes to boost its sales.
Mashood Ali Khan, a former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers had said earlier this year that investors were highly active due to the high demand for vehicles and “own money” was thriving.
Now, however, the situation has changed and investors are selling vehicles below their invoice price by offering discounts due to the thinning demand.
Audi price cut
A massive cut in various models of the Audi e-Tron has taken the auto market by storm.
Market insiders attribute the massive price drop to expiry the of SRO1571(I) 2022 on Nov 21, which dealt with regulatory duty on electric vehicles.
The new ex-showroom price of the e-Tron 50 is Rs22.3 million compared to Rs32.45m down by Rs10.15m. The price of e-Tron SB has been reduced by Rs11.30m and now it would be available at Rs24.85m.
The new price of an e-Tron GT is Rs34.50m compared to Rs48.32m showing a fall of Rs13.825m.
After a cut of Rs19.50m, e-Tron GT RS now carries a price tag of Rs48.5m.
The duty on electric vehicles had been raised to 100pc from zero in the last week of August and was set to expire on Nov 21.
Published in Dawn, November 27th, 2022