PREMIUM ON NEW CARS REGISTERING RISE
The menace of premium on new models is likely to dominate the market in the current year
From KHALID BUTT, Lahore
July 25 - 31, 2005
Premiums on newly assembled cars are reaching out to its new altitudes following the late delivery of cars by the assemblers with new models thronging the market. The dealers remarked that the late delivery has been infusing a renewed buying passion among customers. Market players and even assemblers think that the menace of premium on new models is likely to dominate the market in the current year with the same tendency since the demand and supply gap is still widening. Premium on Toyota Corolla is being charged at Rs 150,000- 160,000 as compared to Rs125,000 two weeks back, while premium on new automatic Daihatsu Cuore is being demanded at Rs 75,000.
Indus Motors, with the exception of new automatic Cuore, has already suspended the booking of new Corolla model. Buyers who had booked Corolla prior to suspension of booking, would have to wait for at least five to six months to get a new car. In some cases, the delivery period goes beyond six months.
Premium on new Honda Civic increased by Rs† 25,000, as it now ranges between Rs120,000-150,000 as compared to Rs120,000 two weeks backs.
The premium on Suzuki Cultus is being charged at Rs 125,000 but in some models and colours, dealers are demanding Rs100,000. Two weeks back, premium on Cultus ranged between Rs150,000-160,000. Customers can get the delivery of Cultus by September if they book it today.
Premium on Mehran 800cc ranges between Rs30,000-35,000, while on Alto 1000cc, the present rate is Rs50,000-60,000 depending on the model and colour.
Dealers said that the rate of premium on Honda City is tagged at Rs 150,000 as compared to Rs 125,000 two weeks back.
They said that the issues of high premiums and late delivery of cars had not been addressed by the assemblers despite achieving over 70 per cent car production every month.
On the other hand, assemblers do not agree that the market situation relating to high premiums and late delivery is so pathetic, as portrayed by the used car importers' body.
The demand and supply gap is closing and these issues will not stand any more after six months, they said, adding: most of the newly assembled cars are now being handed over to the customers in two to three months except for a few models which were being delivered in five to six months.
The dealers said that premium on new cars still exists but it was in the narrow range of Rs10,000-40,000. They said it were not the investors who had already devastated the car market but currently a lot of "common people" were making huge bookings of new cars. Even housewives had also become active in grabbing a new Sedan to make timely profit.
The situation in car market, however, is now stabilizing since the local car industry has increased its production capacity to bring the demand and supply gap closer. But, a senior executive in a leading car industry said that the car assemblers are now in a fix whether to increase the prices in view of rising steel prices or continue to absorb it.
He said that the price of steel sheets, being imported from Germany, Japan, Taiwan and Korea, had risen by 27-30 per cent after the worldwide steel crisis.
Even the local vendors were exerting pressure on assemblers to raise the component prices, but carmakers had been dilly-dallying in this regard. He said the car industry had been absorbing the recent rise in cost of production despite government's demand for price cut. He was of the view that the year 2004-2005 had seen a demand and supply gap of only 15,000 cars which was expected to shrink by June 2005-2006. Analysts said that the chances of opening used car imports seem remote.
However, they think that the industry would continue to remain over-protected as import duties on new cars had been slashed in such a way that imported cars would remain costlier as compared to locally assembled cars, leaving little room for the buyers to ponder twice before its purchase.
CNG FEATURING IN AUTOMOBILES
The carmakers have geared their efforts up to meet the rising pressure of orders for CNG-fitted vehicles following the rising petrol prices as the demand of CNG cars has risen by 45 per cent during one year.
Data made available to PAGE shows that around 14,000 CNG-fitted vehicles are being added up every month as compared to 8,000 units last year. The petrol still costs 50-60 per cent more than the gas despite slight increase in CNG prices.
"The share of CNG vehicle sales now ranges between 60 and 70 per cent in the total sales of vehicles as compared to 40 and 50 per cent a year back," General Manager Marketing, Pak Suzuki Motor Company, said.
The demand of CNG vehicles is progressively increasing, and the company is under pressure due to rising booking of CNG-fitted vehicles. Rising petrol prices in the last one and a half years can be one of the main reasons for a demand spurt of gas vehicles. "I think that a CNG-fitted vehicle still has 60 per cent less fuel cost than the car running on petrol." When the petrol was Rs30-31 per litre, consumers were quite reluctant in converting their vehicles to CNG but the actual boom in CNG conversion erupted when petrol prices touched new peaks of Rs38 per litre. In case petrol becomes more costlier in future, the sales of CNG-fitted vehicles will accelerate further, Ashfaq said.
Pak Suzuki offers CNG fitted vehicles in all its models. The company sold a total of 42,400 units in July-February 2004-2005 as against 35,600 units in the same period of 2003-2004, up by 19 per cent. The company sold 18,800 units of Mehran 800cc model, showing a nine per cent growth as compared to 17,200 units. Alto 1000cc sales rose by 71 per cent from 4,200 units to 7,200 units in eight months of fiscal year 2004-2005.
On January 1, 2004, petrol was available at Rs33.78, while diesel and kerosene were selling at Rs22.78 and Rs22.38 per litre. In effect, the price of petrol has risen by Rs11.75 in the last 15 months. In the same period, diesel has become costlier by Rs6.28 per litre.
Petrol prices are feared to go up further in coming fortnights in case international crude oil prices continue to show rising trend. "Time is not far when consumers will be paying Rs50 a litre for petrol. I have been receiving 50 per cent booking for CNG fitted Hyundai Santro as compared to 20 per cent out of the total car sales," Director Marketing, Dewan Farooque Motors Limited (DFML), Farooq Mustafa, said.
"If petrol continues to become costlier, sale of CNG cars is expected to hover between 70-80 per cent in coming months as compared to current 50 per cent," he added.
He said that awareness of using CNG can be one of the main reasons behind the flourishing demand of gas vehicles in the country, besides the ever-rising petrol prices. A total of 3,900 units of Santro were sold during July-February 2004-2005 as compared to 3,800 units in the same period of 2003-2004. Total sales of Santro in 2003-2004 stood at 6,922 units.
President CNG Station Owners Association of Pakistan, Malik Khuda Bux said that currently a total of 600,000 cars, fitted with CNG, are running on the roads as against 450,000 vehicles a year back.
The demand of CNG is increasing which is evident from the rising number of gas vehicles ranging between 12,000 and 14,000 units as compared to 8,000 a year back, he said.
Currently, there are 648 gas pumps operating all over the country, as against 450 a year back and 400 some two years back. Some 59 applications are under process for setting up new gas stations, while the government has also issued licences for 300 new stations.
Local automobile sector was one of the top most growing sectors in the country during the current year.
It has a weight of 3.96 per cent in large scale manufacturing (LSM) and hence helps overall GDP growth. Indus Motors offers CNG fitted vehicles in only Daihatsu Cuore models, while Honda Atlas does not offer CNG fitted cars in its two models - City and Civic. Price conscious people, who own Toyota Corolla and Honda cars, are gradually shifting their vehicles to cheaper fuel mode.
Revo 800 cc petrol
Revo 800 cc petrol plus cng
Revo 800 cc petrol a/c
Revo 1050 cc petrol
Revo 1050 cc petrol plus cng
Revo 1050 cc petrol a/c
Revo 1050 cc petrol plus cng a/c
Zabardast econo 2 ton 2600 cc
Zabardast super 3 ton 3200 cc
Zabardast jeep 4x4 2800 cc a/c
Mehran le cng
Mehran vx cng
Mehran vxr cng
Alto vxr cng
Cultus vxr cng
Baleno jxr cng
Baleno jxl cng
Bolan a/c cng
Bolan std cng
Ravi pickup std
Ravi std cng
Liana 1.6 mt
Liana 1.6 amt
**5000/= extra for metalic color
Cherry 0.8l basic
Cherry 0.8l comfortable
Altis manual 1.8 petrol
Altis automatic 1.8 petrol
Hilux s/c d/spec
Cuore cx eco (cng )
Cuore cx a/t
City i-dsi mt
City i-dsi cvt
Civic exi mt
Civic exi pt
Civic vti mt
Civic vti mt sr
Civic vti pt
Civic vti pt sr
**40,000/= extra for leather seat
Santro club cng
Grace std12 seat
Grace dual12 seat
Grace dual12 seat
Grace sear 12 seat
Grace van (diesel)
Classic lx ngv (cng)
Classic sx ngv (cng)
Optra sx (semi loaded)
Optra ls manual
Optra ls automatic
Lancer gl 1300cc
Lancer glx m/t 1300cc
Lancer glx a/t 1300cc
Lancer glx m/t 1600cc
Lancer glx m/t s/r 1600cc
Lancer glx a/t 1600cc
Lancer glx a/t s/r 1600cc
Galant m/t 2000cc
Galant a/t 2000cc
Galant diesel m/t 2000cc
Galant a/t vr 2500cc
Galant a/t vr sports 2500cc
Pajero gls m/t d 2800cc
Pajero gls a/t d 2800cc
Pajero gls a/t ltd app 2800cc
Pajero gls a/t v6 p 3800cc
Pajero gls a/t v6 ltd p app 3800cc
Mini bus l300 2500cc
Mini bus dx300 2500cc
Rexton rx-270 diesel m/t
Rexton rx-270 diesel a/t
Rexton rx-270 diesel (top of the line)
Rexton rx-320 petrol (top of the line)
Chairman cm 400s gasoline a/t
Chairman cm 500s gasoline a/t
Chairman cm 600s gasoline a/t
Sunny 1300cc m/t exs
Sunny 1300cc a/t exs
Sunny s 1600 cc m/t exs
Sunny s 1600 cc a/t exs
Sunny 1600cc s/saloon a/t
Cefiro 2300 cc a/t
Xtrail 2200 cc diesel (le-6f) m/t
Xtrail 2200 cc diesel (slx-6f) m/t
Xtrail 2500 cc petrol (le-5f) m/t
Xtrail 2500 cc petrol (slx) a/t
Patrol td42 sgl grade m/t diesel