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Certified used vehicles: Pak Suzuki sells most of the cars in first few hours

March 23, 2013


It was the fourth time in a year when Pak Suzuki Motor Company, a local affiliate of Suzuki Motor Corporation of Japan, was presenting certified used cars for sale. Not many people knew about these offers mainly because of little advertising, yet the company was satisfied with the turnout of buyers who bought most of the cars in the first few hours of a daylong event on Sunday.

Pak Suzuki, one of the three Japanese car assemblers in Pakistan with the biggest market share, showcased the used cars at the Karachi Expo Centre, a spacious land in the city centre but the event was confined to just one hall with 136 vehicles.

Company officials told the media that considering the response, they are now planning to organise such programmes in Lahore and Islamabad as well.

“The drawback with used imported cars is the lack of after-sales service and high maintenance cost. But here we are providing certified used cars with six-month to one-year warranty and satisfactory company services,” Hirofumi Nagao, Managing Director of Pak Suzuki Motor Company, told The Express Tribune.

“Yes, I think this is a good response from our side to the imported used cars in Pakistan,” Nagao said, when asked what answer his company has to the onslaught of imported used cars.

The visitors were of the opinion that the event was not properly advertised, otherwise more people would have shown up. Many were surprised to know that the company had already arranged three such sales offers with a gap of three months in the last 12 months at the same venue.

The vehicles presented for sale were Suzuki Mehran, Alto, Cultus, Swift, Liana and some Suzuki Bolan. Most of the cars were less than three years old, though there were some four and five-year-old models as well. All cars had specifications mentioned on big paper sheets that were displayed on the wind shields.

The price tags were mostly 5% to 15% higher than open market rates. Suzuki dealers and company officials defended the prices, saying customers are ready to pay a higher price because they are getting company warranty with a satisfaction that their cars have gone through 130 checks on the company plant.

Dealers exchange used cars with new ones or buy used cars from their trusted clients and then certify these cars from Suzuki company. By paying a small fee to the company, the dealers get certified used cars, creating a win-win situation for the company, customers and dealers.

The company mainly benefits from exchange offers, which results in an increase in sales of new cars, dealers get good price for certified used cars (certified cars fetch higher price than the market value of uncertified used cars), and the customers love the peace of mind that they get from company warranty on certified cars.

This business model is new in Pakistan, but it has already received much appreciation.

Company officials say these events have created awareness and now more people are willing to buy company-certified cars. Pak Suzuki may have attracted customers and successfully sold few hundred cars in such offers, but ruthless competition from imported used cars has seriously dented their sales in the last two years.

Auto analysts say that the assemblers should launch entry-level car models to compete with imported used cars as almost half of the imported cars in Pakistan fall in the entry-level category. They say car assemblers need to work on quality improvement – the biggest factor why Pakistani customers prefer imported cars.

Published in The Express Tribune, March 19th, 2013.


From → By Farhan Zaheer

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