More than 3 years ago, when the Auto Policy 2016-21 was being formulated, the ex-government said it wanted to create healthy competition in the auto sector and that the policy will help end monopolistic operations in the market.
The primary objective of the auto policy was to create competition, loosen the grip of 3 Japanese players, shorten the delivery period, curb the menace of own/ premium, bring down prices and improve the quality of products offered to the customers. Fast forward 3 years, none of these objectives seems to have been achieved. This is because newcomers haven’t yet introduced anything that competes against the products offered by existing players. They are either focused towards launching commercial pickups and vans or super-expensive options beyond the reach of masses.
Adding to these rather non-competitive options, Hyundai-Nishat has just introduced the Ioniq hybrid liftback in Pakistan. Bearing a price tag of PKR 64.0 lac, the Ioniq hybrid will primarily compete against the Toyota Prius hybrid which is available for PKR 83.7 lac.
This is the segment which hardly represents 1% of market, with annual sales barely reaching three figures or even below. And with sales of hot selling options declining up to -41%, one cannot expect these expensive cars which cost even more than a residential plot or even a small apartment, to sell in decent numbers.
It’s like organizing a baseball match for a large cricket audience. Especially when you know Hyundai have several attractive options such as the i10, i20, Reina, Verna & the Elantra, which are capable to literally give the existing options a run for their money. This only makes one wonder why the newcomers aren’t offering the options which have a huge demand in the market, instead they prefer to remain focused on offering over-expensive options even in these critical financial times when sales of automobiles are already hitting rock bottom.
The Ioniq comes powered by 1.6 liter engine producing 105hp and 147Nm. The engine is assisted by 1.56 kWh electric permanent magnet synchronous motor delivering 43 hp which results in an estimated total system output of 139 hp and 264 Nm. Power is sent to the wheels via a 6-speed dual clutch transmission.
Features include 7 airbags, ABS, ESC, HAC, parking sensors, rear view camera, auto headlamps, automatic AC with climate control, keyless entry, engine immobilizer, 4-way adjustable steering, 5-inch touchscreen multimedia system and wireless charger etc.
Tatsuya Sato, Chief Operating Officer of Hyundai-Nishat while talking to media at the inauguration ceremony of Hyundai’s first Digital Store in Karachi & the launch of new Ioniq hybrid, also expressed concerns over the market situation & said the uncertain rupee-dollar parity has drastically changed the Hyundai-Nishat project feasibility. He said:
“One dollar was equal to Rs 105 when we initiated the project as compared to current rate of Rs 156-158. The rupee-dollar parity is also hitting existing assemblers despite achieving up to 65% localization. Higher indigenization in vehicles can stabilize on which we are focusing more.”
Hyundai-Nishat will begin local assembling of their first vehicle in Pakistan– the H100 Porter commercial pickup by January 2020 with 20% indigenization. According to Sato, the total investment at the Faisalabad manufacturing facility is $150 million with an annual production capacity of up to 15,000 units. The plant will employ 250 people directly, he added. When questioned about low localization and very few jobs, Sato said localization level would be increased to 45% in the next 5 years which would eventually open new job avenues.
Hyundai City Store Karachi
The company has already introduced Santa Fe SUV with an outrageous price tag of PKR 18.5 million (read 1 crore 85 lac), as well as the Grand Starex van priced from PKR 39.9 lac to PKR 51.1 lac. The Ioniq with a price tag of PKR 64.0 lac may look attractive especially when you compare it with the PKR 83.7 lac Prius, but only time will tell how many units the company will be able to sell.
What is your opinion regarding the new Hyundai Ioniq hybrid in Pakistan, let us know with your comments.