Kia having teamed up with Lucky Group made its re-entry in Pakistani market in 2018 under the Auto Policy 2016-21. The South Korean automaker is enjoying tremendous success in recent times as auto sales figure for the first quarter of 2020-21 was Rs 20.5 billion, distinctly up from Rs 3.84bn a year ago, according to a recent story published in Dawn.
Lucky Group’s operating profit in the quarter was Rs 1.54 billion as opposed to an operating loss of Rs 332 million in the same period of the preceding fiscal year. Signifying its growth, the Kia complex in Bin Qasim Industrial Park employs 1,400 people today versus 450 last year.
While speaking to Dawn CEO Asif Rizvi said his product strategy revolves around providing consumers with more and better choices. The company plans to introduce more vehicles, including advanced specification vehicles, superior customer experience and aggressive localization. According to Asif Rizvi:
“The third and newest addition to our locally assembled range will be Kia Sorento, a mid-sized 7-seat SUV built for comfort on a car platform with a V6 3.5 liter 276 HP engine. It will be available in three variants. In addition, a fully revamped imported Kia Carnival is also being launched with deliveries to commence in February 2021.”
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Like everywhere else, the automobile market in Pakistan was hit hard by COVID-19 pandemic & lockdowns earlier this year with economic activities and vehicle production & sales coming to a complete halt. But ever since the lockdowns were eased, car sales picked up momentum with Kia witnessing an encouragingly healthy demand as well. The CEO went on to add:
“The bounce-back of approximately 20% within two months of the lifting of lockdowns was higher than expected. And the outlook for 2021 is very buoyant with a year-on-year expected growth of over 50%. We are fully geared to take advantage of the expected rapid market growth. We will top it up with some phenomenal new products.”
Kia sales are spearheaded by the Sportage, which also happens to be the highly sold product in Kia’s global portfolio. The vehicle got tremendous success for being an urban SUV, providing car-like comfort for in-city driving with an added benefit of AWD in the top-spec trim. The addition of a new base variant called Sportage Alpha also turned out to be a profiting move since having a price tag lower than that of Honda Civic 1.5L turbo variants, is enticing high priced sedan buyers into purchasing a quality SUV.
When asked about rising car prices by Japanese assemblers despite PKR’s recovery against the dollar from Rs 168.43 on August 27 to around Rs 159 today, Asif Rizvi said he is more concerned about the customers.
“They have seen 3 to 4 price hikes during the past year. We have not raised the prices since our launch over 15 months ago. The impact of low localization has been offset in part by the new entrant concessionary duties.”
The company’s priority has been to build customer confidence through a warranty of 4 years/100,00 kilometers through a network of 30 dealerships. The CEO termed current Automobile Policy 2016-21 successful as it has attracted 8 active new entrants and over 20 new vehicle models. The policy has also helped increase the installed capacity in the country from 250,000 units per year to approximately 450,000 units.
Asif Rizvi said his company has recommended to the government to eliminate the federal excise duty (FED) of 2.5-7.5% and additional customs duty of 7%. It should also reduce the 5% customs duty equitably in all existing import structures to grow the industry and fuel its expansion.
Full story: Dawn