If you observe the market trend, particularly after the year 2018, car prices have been frequently revised in Pakistan with nearly a dozen revisions made every year. However, since last year or so, the changes have become even more frequent. So far more than 7 price revisions have been announced during the first 8 months of this calendar year alone.
The main cause of such frequent price changes is the declining currency value relative to the US Dollar, which has been slipping steadily for about five years and has been depreciating precipitously over the past 16 months. This scenario has originated a relatively new term in our market, as far as new car sales are concerned– the Price Lock offers.
Price lock offers are generally there to provide customers with the assurance that they will not be charged more for a product or service than the agreed-upon amount at the time of purchase. This helps to protect customers from increases in cost due to market fluctuations. Price lock offers also provide customers with peace of mind, as they know that their purchase won’t be affected by changes in pricing.
But the situation here in our market is a bit different from the rest of the world. Battling with NPDs (non-production days) due to restrictions imposed on the imports and hurdles in the clearance of LCs, most assemblers are unable to keep up with their plant operations and are running short of inventory & ready units. However, they still want to get hold of the booking amount as sales are constantly falling.
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The purpose of the Price Lock is to entice customers to avoid impending price increases, but the buyer is never sure how long it will take to receive his new vehicle because the timeframe is either never committed or deliveries on promised dates are not fulfilled in most cases. Interestingly there are a few instances where the bookings of the vehicles were closed immediately after the price locks were announced.
Additionally, there are instances in our market where people are still waiting for almost two years to receive the vehicles while all subsequent price increases are brazenly applied to the customers who paid in full to reserve their vehicles. So, while Price Lock offers are certainly appealing, there is little you can do if an automaker fails to keep its promise.
Also, if the delivery date is unknown, the price lock offers lose half of their charm. But with few options available in an already starved market, it certainly is an attractive offer for those who have ample cash to spend and can wait for an unspecified period of time to get their vehicles delivered. Amusingly, the more price adjustments made after you reserve the car, the happier you’ll be with the Price Lock.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com