Demand of Small Cars to Increase as Fuel Prices Reach Record High

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Pakistan has just witnessed a Rs 60 per liter increase in petrol prices within a span of hardly 8 days, something that was never ever experienced before. Petrol now cost record Rs 210 a liter whereas according to information, another increase of Rs 60 per liter is anticipated which will take the price of petrol up to Rs 270 per liter soon.

Alongside petrol, the prices of other fuel including the high speed diesel & light speed oil have also been increased. The massive increase in fuel prices will have put an adverse affect on the economy including the high electricity, food & commodity prices and is already taking them out of the reach of masses. Plus it will also impact the buying trends of new automobiles.

Related: Auto Sector Expects Rollercoaster Fiscal Year Ahead

Due to rapidly depreciating currency and rising shipping & raw material cost, car prices are being swiftly revised with 3 substantial prices revisions already announced within the first 4 months of this calendar year. Many automakers including Kia, Toyota & Proton have already stopped taking bookings until further notice due to uncertain economic and political situation of the country. However the one automaker seems pretty much unaffected with this situation is Suzuki.

wagonr cultus 3

The company only deals in small cars, mostly hatchbacks with 3 out of 4 models on offer being 1,000 & below. Plus it also sells the old duo of Ravi & Bolan, the 40 years old pickup & minivan which still have no direct competitor in the price. Its most successful product is the Alto which not only is the highest selling car of the country but has also shattered plenty of records ever since it was launched in mid 2019.

Related: Alto 660cc Shatters Yet Another Record

One of the main reasons behind the massive success of Alto is its fuel economy. It is the only 660cc kei car assembled in Pakistan and despite having rather awful looks, it has become a tremendous success due to its impressive fuel consumption. Another factor is the price, since most ordinary sedans have went past Rs 3.0 million price range, the buyers of sedan segment are now shifting towards hatchbacks and among the available options, the Alto is the most suitable one since its the least expensive of the lot, and is rather pocket friendly when it comes to consuming fuel– something which is considered an important factor in these tough economic conditions.

alto 2

Another advantage of small cars is their size, which is easy to maneuver in congested traffic situations as well as to easily fit in a tight parking space, something owners of larger cars don’t enjoy. Also modern designs allow roomier interior space so they are no longer that cramped for the occupants as it used to be the case with hatchbacks from older times. And the presence of automatic transmission is another plus.

Related: Mehran to Alto 660cc- For Pak Suzuki the Change was Good, Very Good

Suzuki was struggling with supply-chain issues with its other two hatchbacks– the 1,000cc duo WagonR and Cultus, however it has started delivering the units now. So far during the first 10 months of this fiscal year, Pak Suzuki has sold 18,739 units of WagonR, 19,431 units of Cultus and 58,250 units of Alto which is three times the sales of WagonR and more than twice of that of Cultus.

8th Generation Suzuki Alto Hatchback Title image

No other automaker has yet introduced quality small cars in Pakistan that can go against the likes of Alto. Since years, both Honda and Toyota having some impressive 660cc kei cars offered back in the Japanese domestic market have remained reluctant to introduce anything in the hatchback segment. Kia Picanto is the only exception that primarily competes against the 1,000cc Suzuki Cultus (Celerio) but has a relatively high fuel consumption. The likes of Price Pearl which under the skin is a 30-years old Mehran pose no threat to the Alto due to its limited nationwide availability and lack of automatic transmission, as well as not so impressive fuel consumption since it carries an obsolete 800cc engine under the hood propelled by an ancient 4-speed manual transmission.

Related: Toyota & Honda Suffering Due to Absence of Small Hatchbacks

The extremely high cost of petrol have made the small cars such as Alto or the WagonR & Cultus, even more attractive for the masses since sedans and crossover SUVs have become too impractical from the consumption point of view considering the fact you won’t even get 5 liters of petrol against spending Rs 1,000. And with CNG already out of equation the only viable option left are the small hatchbacks. Whether automakers will shift their focus from introducing super-expensive crossovers to launching fuel-efficient hatchbacks & kei cars in Pakistan, we will have to wait to find out.

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