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Unfamiliar approach: Pak Suzuki embarks on drive to lure customers

March 23, 2013


Domestic car assemblers, who are experiencing low sales of new cars, are embarking on a fresh drive to attract or at least keep their loyal customers. An example of this has come from Pak Suzuki Motor Company which is going to present certified used Suzuki vehicles for sale – a relatively unfamiliar idea in Pakistan.

Pak Suzuki will put on sale different models of Suzuki vehicles at the Karachi Expo Centre on Sunday. When approached, the company just confirmed that it is going to organise the event, but did not share further details like how many cars they are going to present, types of models, price tags, etc.

“It seems that the company is equally focusing on its customer base in the second-hand car market,” Atif Zafar, an analyst at brokerage house JS Global Capital, said. “What is clear from the outset is that Suzuki customers will be more satisfied with the company’s certified used cars because people tend to trust companies more than car dealers.”

Pak Suzuki has been facing challenges both on sales and profitability fronts, so this move should not take anybody by surprise, he added.

Local car assemblers have faced uneasy times, especially in the last couple of months, because of influx of imported used Japanese cars. Though the government has reduced the age limit for import of used cars from five to three years, sales of locally assembled cars have failed to pick up pace since mid-December last year.

Car assemblers are perturbed about high sales of imported used cars despite reduction in the age limit for imported cars, Sarfaraz Abbasi, an analyst at brokerage house Summit Capital, said.

This time, Pak Suzuki is going to target the secondary market that has different market dynamics, he said, adding the result of this company drive will mostly depend on what prices it is asking for the certified vehicles.

Last fiscal year 2011-12, Pakistan imported around 55,000 used cars and has already imported over 40,000 used vehicles in the first eight months of the current fiscal year, according to car importers.

Locally assembled auto sales (cars and light commercial vehicles) clocked in at 12,628 units in February this year, down 16% compared to a year earlier and 1% compared to the previous month. Sales in eight months (July-February 2012-13) stood at 82,977 vehicles, down 26% year-on-year.

Two major car producers, Pak Suzuki and Indus Motor, recorded flat sales compared to the previous month.

Sales of Pak Suzuki have stabilised, with flat sales at 7,000 units in February. However, considering the presence of ample stocks of imported used cars in showrooms, sales have yet to depict a strong sequential uptick, AKD Research recently said in its report.

Indus Motor Company recorded sales of 3,588 units in February, up 0.8% month-on-month, supported by Corolla sales at 3,300 units, up 1.2% month-on-month, but Hilux sales dropped 4.9% to 251 units.

Honda Atlas Cars recorded sales of 2,015 units in February, lower by 9.2% MoM, as Civic and City sales fell 8% and 10% MoM, respectively.

Published in The Express Tribune, March 16th, 2013.

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