Paradigm shift in Pakistan’s auto industry

[Saiyan0321]

Paradigm shift in Pakistan’s auto industry​

Decline in import of luxury cars providing level playing field for SUV makers

KARACHI:
Consumers must have wondered why new entrants in the auto sector of Pakistan are introducing more sport utility vehicles (SUVs) instead of low-end cars, which were expected to be rolled out when the new auto policy was unveiled.

“Pakistan’s auto market is growing and a switch from sedan to SUVs or crossover is taking place,” said AHL Research auto analyst Arsalan Hanif. “With advanced technology and better safety features in the SUV segment, its acceptability ratio has increased,” he added.

Companies have pinned high hopes on this category, which is reflected in the recent testing of an autonomous SUV, UNI-T, by the joint venture of Master Motors and Changan.

With a 10-20% price difference between sedan and SUVs, the consumers had started giving preference to SUVs because of better features and a more luxurious feel, Hanif said.

Read: Pakistan’s auto sector: growth comes at a high cost

On the other hand, a decline in imports of luxury or high-end cars is also providing a level playing field for SUV manufacturers.

Likewise, on the global front, SUVs are attracting more attention as their market share is increasing. For instance, in India, the SUV market share has increased from 10% to 36% in the last eight years.

However, contrary to Hanif’s views, Regal Automobile Pakistan Managing Director Muhammad Adeel Usman said that mostly the cars introduced recently were not SUVs, they were called crossover utility vehicles (CUVs) and their estimated sales were 5,000 units per month for all companies.

“As far as sales performance of SUVs is concerned, KIA has managed to sell around 25,000 Sportage since its operations commenced,” said Hanif.

Hyundai Nishat sold 2,759 units of Tucson in the first nine months of current fiscal year 2020-21. As per market grapevine, MG, an unlisted player, also sold more than 2,000 units.

A majority of new players (BAIC, Hawal, Peugeot, Changan and Cherry) are also planning to launch SUVs in Pakistan because low-end cars face more price competition and have low margins.

Read more: Auto parts body demands release of tax refunds

The new entrants are introducing CUVs following the trend in the international market where sales of CUVs have increased rapidly, according to Usman.

Pakistanis have been deprived of durable and affordable vehicles for a long time, but with added advantage of a healthy economy, automobile players are now enjoying an amazing year.

Banks have given a further boost to demand, by providing the highest number of auto loans this year, he added.

Although the new entrants have started launching “budget sedans”, CUVs are an easier market to tap at the moment.

The buying power of consumers also provides a level playing field as lower interest rate, improvement in macros, higher foreign remittances and revival of economic activity have improved the purchasing power of consumers, highlighted Hanif.

Published in The Express Tribune, May 16th, 2021.

https://tribune.com.pk/story/2299933/paradigm-shift-in-pakistans-auto-industry

 

[kumata]

Just curious question -

Do Pakistan have any indigenous OEM;s there like We have TATA & Mahindra. Assembling & Importing is one thing but manufacturing from ground 0 is another.

 

[Kaptaan]

Just curious question -

Do Pakistan have any indigenous OEM;s there like We have TATA & Mahindra. Assembling & Importing is one thing but manufacturing from ground 0 is another.

No. We are a failed, bankrupt country. We can't even make anything while Indians have managed to pull rickshaws all the way to Mars.

 

[Saithan]

No. We are a failed, bankrupt country. We can't even make anything while Indians have managed to pull rickshaws all the way to Mars.

Please, it’s a good question. With Chinas help you could come up with a domestic brand even if % domestic parts are low it could increase with time.

 

[Dalit]

Just curious question -

Do Pakistan have any indigenous OEM;s there like We have TATA & Mahindra. Assembling & Importing is one thing but manufacturing from ground 0 is another.

You don't worry about Pakistan.

 

[Jackdaws]

No. We are a failed, bankrupt country. We can't even make anything while Indians have managed to pull rickshaws all the way to Mars.

Ah, it's so heartbreaking to see West Pakistanis wistfully reminisce about the hand pulled rickshaws of erstwhile East Pakistan.

 

[Dalit]

Ah, it's so heartbreaking to see West Pakistanis wistfully reminisce about the hand pulled rickshaws of erstwhile East Pakistan.

You "contributing" on defencehub too now?

 

[Kaptaan]

Please, it’s a good question. With Chinas help you could come up with a domestic brand even if % domestic parts are low it could increase with time.

It's a great question but the intent is not. It's to gloat and chatter 'TATA'. But since you ask my answer is yes it is possible in near future. For that to happen smuggling of cars from Iran/Afghanistan has to stop and the Japanese monoplies like Toyota etc have to reined in as their influence is huge. I will give a fuller explaination later.

 

[Jackdaws]

You "contributing" on defencehub too now?

You followed me here as well?

 

[kumata]

No. We are a failed, bankrupt country. We can't even make anything while Indians have managed to pull rickshaws all the way to Mars.

well,

I asked a genuine question out of curiosity as i don;t follow Pakistan's automobile industry but you gave it a good twist. Anyways thanks for letting me know about Pakistan being failed, bankrupt nation.

When they have ambassadors like you, why would they need external enemies.

 

[kumata]

You don't worry about Pakistan.

I am not worried sir. Forums are for healthy discussions & getting to know each other but it seem like people do not like even honest questions.

 

[kumata]

Please, it’s a good question. With Chinas help you could come up with a domestic brand even if % domestic parts are low it could increase with time.

Agree. There is no point in re-inventing the wheel when it is already there. China themselves started with copy paste job while govt protected them on IPR thefts but still over a period of time, they learned and acquired European companies like MG hector & Banelli to get that legitimacy. Our Own Mahindra / TATA started that way with Mahindra doing license prod for willeys & tata started off by license prod of Mercedes truck and have grown since than to be on their own feet. same in 2 wheeler industry as well. Hero / Bajaj all started like that.

 

[kumata]

It's a great question but the intent is not. It's to gloat and chatter 'TATA'. But since you ask my answer is yes it is possible in near future. For that to happen smuggling of cars from Iran/Afghanistan has to stop and the Japanese monoplies like Toyota etc have to reined in as their influence is huge. I will give a fuller explaination later.

Kaptaan Saab,

My Intent was pretty clear . I never wanted to gas light here. Learn to read posts on their face value than reading between the lines. Not everybody is out here to Malign Pakistan & anyways, I get nothing by maligning . I myself work with Pakistanis in my work daily who immigrated to US & we prefer to communicated in Punjabi / Urdu combo than english as that gives us that feeling of close to each other. ..so spare me this "Intent"

Now coming to topic, I am surprised that you are saying that Afghanistan / Iran dump their vehicles in Pakistan. While a porous border with Afghanistan is problematic for sure , smuggling cars from Iran seems far fetched. Is border infra so horrible that they cud not check Cars coming in

 

[FalconSlayersDFI]

well,

I asked a genuine question out of curiosity as i don;t follow Pakistan's automobile industry but you gave it a good twist. Anyways thanks for letting me know about Pakistan being failed, bankrupt nation.

When they have ambassadors like you, why would they need external enemies.

Remember that Pakistani bullet, road prince .

 

[Milspec]

Remember that Pakistani bullet, road prince .

Let's us not mock others, we aren't that great at Automobiles either.

 

[Milspec]

Paradigm shift in Pakistan’s auto industry​

Decline in import of luxury cars providing level playing field for SUV makers

KARACHI:
Consumers must have wondered why new entrants in the auto sector of Pakistan are introducing more sport utility vehicles (SUVs) instead of low-end cars, which were expected to be rolled out when the new auto policy was unveiled.

“Pakistan’s auto market is growing and a switch from sedan to SUVs or crossover is taking place,” said AHL Research auto analyst Arsalan Hanif. “With advanced technology and better safety features in the SUV segment, its acceptability ratio has increased,” he added.

Companies have pinned high hopes on this category, which is reflected in the recent testing of an autonomous SUV, UNI-T, by the joint venture of Master Motors and Changan.

With a 10-20% price difference between sedan and SUVs, the consumers had started giving preference to SUVs because of better features and a more luxurious feel, Hanif said.

Read: Pakistan’s auto sector: growth comes at a high cost

On the other hand, a decline in imports of luxury or high-end cars is also providing a level playing field for SUV manufacturers.

Likewise, on the global front, SUVs are attracting more attention as their market share is increasing. For instance, in India, the SUV market share has increased from 10% to 36% in the last eight years.

However, contrary to Hanif’s views, Regal Automobile Pakistan Managing Director Muhammad Adeel Usman said that mostly the cars introduced recently were not SUVs, they were called crossover utility vehicles (CUVs) and their estimated sales were 5,000 units per month for all companies.

“As far as sales performance of SUVs is concerned, KIA has managed to sell around 25,000 Sportage since its operations commenced,” said Hanif.

Hyundai Nishat sold 2,759 units of Tucson in the first nine months of current fiscal year 2020-21. As per market grapevine, MG, an unlisted player, also sold more than 2,000 units.

A majority of new players (BAIC, Hawal, Peugeot, Changan and Cherry) are also planning to launch SUVs in Pakistan because low-end cars face more price competition and have low margins.

Read more: Auto parts body demands release of tax refunds

The new entrants are introducing CUVs following the trend in the international market where sales of CUVs have increased rapidly, according to Usman.

Pakistanis have been deprived of durable and affordable vehicles for a long time, but with added advantage of a healthy economy, automobile players are now enjoying an amazing year.

Banks have given a further boost to demand, by providing the highest number of auto loans this year, he added.

Although the new entrants have started launching “budget sedans”, CUVs are an easier market to tap at the moment.

The buying power of consumers also provides a level playing field as lower interest rate, improvement in macros, higher foreign remittances and revival of economic activity have improved the purchasing power of consumers, highlighted Hanif.

Published in The Express Tribune, May 16th, 2021.

https://tribune.com.pk/story/2299933/paradigm-shift-in-pakistans-auto-industry

Pretty good development, quite in line with the rest of the world favoring SUV's/crossovers over Sedans/Saloons.

 

[FalconSlayersDFI]

Let's us not mock others, we aren't that great at Automobiles either.

Who said that?