Hybrid Cars – A Cost Advantage Over Time?

Hybrid Cars are dominating Pakistani market. The duty on hybrid cars is comparatively lower and people buy these cars because they run on electricity, thus, consuming less of conventional fuel. But, do they save cost over time?

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If we see, hybrid cars cost more than the conventional cars and the difference is not small in costs. So, if we use a hybrid car, say for 3 years, will it save enough fuel that the extra initial cost is covered and plus we get extra fuel benefit. I don’t think so.

If you buy a hybrid car because you care about the environment, it will do the job. But if you buy hybrid car with the mentality that it will save fuel and in turn the cost, it doesn’t seem so. Because you are spending at least 1 or 2 lac extra on its purchase, that too, most of the times, reconditioned cars. It won’t save you any cost over time in my opinion. But the market is switching towards these cars and it is good for the environemnt and natural resources.

Honda Civic 2016 – A New League!

There is always a tussle between Toyota Corolla fanatics and Honda Civic fanatics and both of them try to point out the manufacturing and technical blunders of each other’s choice.

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Before Honda Civic’s 2016 launch, both the cars were in the same league. But as Honda launched Civic 2016, even if we just look at the shape of it, we can feel that Honda Civic has moved to upper league. Now, if someone compares the two, I feel it would be injustice to Civic and we should give all the credit to Honda for such a positioning.

No doubt these two cars are still competitors but we can also see that now when people see Civic 2016 on the road, there reaction is different and when they look at Toyota Corolla, they see it as a regular sedan car.

White Cab Market Declines

Since the introduction of Careem and Uber, we have seen many ups and downs in the taxi industry and automobile industry. One of these ups and downs is the market of White Cab.

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White Cab was always considered as a convenient source of conveyance for those who usually travel locally or internationally. Since it was considered convenient, a particular SEC never cared about the prices as they could easily afford it. But now after the introduction of Careem and Uber, people of not just one SEC are using it.

It is more convenient to order a taxi using mobile app and they charge remarkably low. Now, those who couldn’t take White Cab are using Careem and Uber and those who could afford are also using Careem and Uber. The introduction of these two has made it a lot easier for people to travel around.

Investments in Uber and Careem

Uber and Careem introduction in Pakistani market surely changed the transport industry, but it didn’t stop there.

This introduction is also having the impact on automobile industry. People with resources are now buying new and used cars to provide it to Uber and Careem and earn extra money. They buy a car and hire a driver and register the cars with the two taxi giants. This requires less hard work and pays good. Normally in Pakistan, the prices of the cars do not decline even if they are used for years. So, people can earn earn the extra money and can sell car after some years without no or least of the devaluation.

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The demand of 660cc and 1000cc cars is rising and prices are shooting up due to this. This is creating problems for those who want to buy cars for personal use. Who knew that such an introduction would have such an impact on the local automobile industry.

New Entries in Pakistan Automobile Sector

Pakistan has a heavy duty for for the imported cars to provide security to the local players. Honda, Toyota and Suzuki assembly plants are providing enough cars to fulfill the demand. Still, the consumers are ready to pay the duties and wait for months to get their cars imported.

As we have seen in the case of Japanese cars. they have dominated the Pakistani market for along time now. Consumers already having quality cars being assembled in the country, go for the reconditioned Japanese cars.

Now the foreign giants have read the situation and are ready to enter this market. We have already seen Audi entering. Now Hyundai, Volkswagen and some other giants are planning to tap this market. This will pose a great competition in the local players and will surely benefit the consumers.

Global Market’ Perspective Towards Pakistani Auto Market

After some dark years for the Auto market of Pakistan, there is finally a light of hope coming our way. According to recent stats, the car sales in Pakistan have recently crossed 200,000 units, which reflect an abrupt increase in the demand. And this is why, the automakers seem quite active in the production and launch of new cars in Pakistan.

According to an international magazine ‘Nikkei Asian Review’, new auto players are greatly observing the rising potential of Pakistan’s auto market. The publication further said that due to opportunities offered by government to tap the middle class consumers, new players like Renault, Volkswagen and Kia Motors are also gearing up to step in the Pakistan’s auto market with some exciting options for the consumers. Moreover, German automaker ‘Audi’ has also shown interest in setting up an automotive assembly plant in Pakistan.

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The record sale of 218,000 cars in the fiscal year 2016 confirms the statement that there’s great potential in this market and buyers are desperately looking for new options in different categories of passenger cars. This record sale might be a reason for the launch of new Suzuki Ciaz and the news of Hyundai re-entering the local market.

Indus Motors has recently reported 11% increase in sale for the fiscal year 2016 whereas the annual sale of Indus motors was around 600,000 cars. However, the sources of Atlas Honda reported an increase of 50% in the sale of City and Civic.

 

Investment Scope in Auto Industry

There is big scope of more investment inflows to expand production capacity as competition among car manufacturers increases.

Auto is perhaps the only industry which is doing well at a time when others – ranging from textiles to farm products – are hit hard by stagnating exports. Reduced foreign demand, difficulties related to the international oil price crash and energy shortages are key factors hitting other industries.

“The auto industry must now focus on enlarging output of its cars and export more units to countries in its neighbourhood. It should also tap new markets in Central Asia,” Minister for Commerce Khurrm Dastgir said.

Suzuki has unveiled its operational  and financial results for 2015. The company is jointly owned by Pakistan Automobile Corporation (Paco) and Suzuki Motor Corporation of Japan (SMC). SMC owns 73 per cent of the joint venture.

Paco said: “In January to September 2015, Suzuki tripled its  pre-tax profit to Rs6.33 billion as compared to Rs2.18 billion in the like period of the previous year.”

Toyota cars assembled by Indus Motors is moving up the ladder fast. Its report said: “Toyota sold 57,000 car in 2015 – a record in the company’s history. We have exceeded production capacity which is usually 54,800 units a year.”

Expansion in Pakistan Automobile Industry

Pakistan’s auto industry is enjoying a boom. All leading brands such as Suzuki, Toyota and Honda have reported high profits.

The biggest car producer – Suzuki – shot down the industry’s production record growth of 31 per cent by upping its own output by 54 per cent in 2015. Suzuki maintained its leadership among the country’s Big 3.

The sale of cars manufactured and assembled in Pakistan climbed to 179,953 units in 2015 from 136,888 units in 2014, the Ministry of Industries said.

What is pushing this car buying and production spree? The yen stays weak against the greenback, helping car assemblers to buy imported spare parts for cheap prices. Imported spares account for around 75 per cent of the equipment which goes into assembling cars. Commercial banks’ interest rates are now the lowest in 42 years, making car financing cheapest in  decade.

Golden Number for Rs. 2.5 Million

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The Rawalpindi Excise and Taxation Dept claimed to have earned Rs. 2.5 million by selling golden numbers for cars and bikes. There were total 136 numbers auctioned for motorcycles and 100 for cars.

In the recent bidding process, the digits ‘1’, ‘2’, ‘3’, ‘4’, ‘5’ and ‘7’ were auctioned for Rs 70,000, Rs 14,000, Rs 26,000, Rs 41,000, Rs 85,000 and Rs 73,000, respectively. The auction took place under the supervision of Excise and Taxation Dept Rawalpindi.

 

Deewan Motors Restarted Business

Deewan Farooque Motors was one of the biggest dealers and manufacturers of cars in the local market. They went out of the industry some time ago.

Back then, in 2000, they signed an agreement with Hyundai which is now over and Mian Mansha now has signed an agreement with Hyundai recently.1176766-dewanmotorsx-1473110384

Deewan group saw an expansion in the automobile industry recently and came back to the market.They have finalized an agreement with SsangYong Mototrs Company, the fourth largest automobile manufacturer in South Korea.

We are seeing all signs of expansion in the motor vehicle industry of Pakistan.