People are thrilled by changing trends in the automobile market. The arrival of Toyota Vitz, Toyota Platz, Toyota Deut, Nissan March, Daihatsu Mira and Victoria, Toyota’s jeeps and even luxurious cars like BMW, Mercedes, Toyota Jeeps, etc., clearly reflects the passion of buyers for style and brands.
“During the first six months of 2006, consumers will witness a variety of 650-1,300cc used cars,” All Pakistan Motor Dealers Association Chairman H.M. Shahzad claimed, adding that these small cars are being brought in to “give a tough time to locally-assembled Suzuki cars, Daihatsu Cuore and Hyundai Santro”.
With the start of leasing facility for used cars on small scale, many people are expected to shift to imported cars.
He said Toyota Vitz, Platz and Deut were available at Rs550,000-750,000 depending on the model. Daihatsu Mira and Victoria can be purchased at Rs450,000-550,000. The 650cc Mini Pajero can be bought at Rs450,000-550,000. Toyota Allion is available at Rs1.26 million.
During the last six months, around 8,000 used vehicles (650-2,000cc) had arrived out of total 12,500 units, including 3,000-4,000cc, he said.
Under the transfer of residence scheme, car models ranging from 1995-2002 are being imported. Under the baggage scheme, 2003-2004 models are being brought, while three-year-old cars are being imported under the gift scheme. Used cars are mainly arriving from Japan.
With the arrival of used cars it is felt that the market share of locally- assembled cars will shrink. But in real sense it is yet to hit the market share of locally-made cars owing to huge demand and supply gap that still exists.
“The demand for car is 270,000 units a year, while the local industry aims to provide over 150,000 units by the end of the current fiscal, leaving a big gap to be filled by imported and locally-made cars,” he said.
“At present the import of cars is not hurting the local industry and it may not in future, as the demand for car is rising phenomenally due to attractive leasing and car financing facilities,” he said, adding that leasing of used cars would boost the demand for old cars. He pointed out that high premiums on locally assembled cars were now tumbling down because of the arrival of used cars. Even the recovery of instalments from the buyers of locally assembled cars is reported to be 98 per cent.
He also claims that parts and accessories of used cars are available at Plaza, the hub of used and new parts, at M.A. Jinnah Road.
But the Central Vice-Chairman, Pakistan Automobile Spare Parts Importers and Dealers Association, Khalid Mahmood Magoon, said currently parts of used cars are not available in the market. “Owners of used cars can find parts and other accessories after two months in the market,” he said, adding that importers had started opening letters of credit for the import.
“We have been waiting for the flow of used cars’ import to rise. We now think that the import is now gaining momentum. It is right time to import parts of used cars. There will be no problem of parts in the next few months,” he said and added that both genuine original Japanese and replacement (Taiwan) parts would be available in the market very soon.
The demand for cars in Pakistan is estimated at 256,000 units per annum and the industry is currently providing 126,000, leaving a gap of 30,000 cars, he says, adding that car owners have advance bookings worth over Rs70 billion in their hands. They were earning interest on the consumers’ money, he said.
The Director Corporate Planning, Indus Motors Limited, Shah Saad Hussain said some dealers had started offering leasing facility for used cars on small scale. Dealers are offering bank financing on Toyota Vitz on a down payment of Rs130,000 and Rs12,500 monthly instalments.
“The local industry will face erosion of the market share if large scale leasing facility is made available on used cars. It will be a big problem for the local car makers,” he said, adding that used car imports may touch 40,000 per annum because of this leasing facility.
“The industry feels that the liberalization of used cars import is a temporary measure taken by the government in the budget and trade policy to fill the demand and supply gap,” he said. “We think that the government will reverse the decision when the local production catches up with the demand in future,” he added.
“The government should provide a long-term policy to the assemblers who are making every effort to fill the demand and supply gap by tripling their production and investing billions,” Mr Hussain maintained.
He pointed out that India and Thailand had imposed 150 per cent and 80 per cent import duty, respectively, on used cars to protect their industry.
