Pakistan’s automobile market went into shambles ever since the Rupee started to lose its value against the US Dollar. This started to happen in 2017, before that one Dollar was valued at around Rs 100 for a long time.
In less than 20 months, the value of PKR against USD declined from Rs 100 to around Rs 152. And the impact of this became evident in the local auto sector since almost every “locally assembled” car in Pakistan remains heavily dependent on imported components. Prices of new cars were being revised by up to 5 times in a year with hatchbacks becoming as expensive as sedans, B-sedans becoming as expensive as C-sedans, and so on & so forth.
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Pak Suzuki launched the 8th gen Alto (660cc) in Pakistan as the entry-level hatchback replacing the Mehran (which in fact was the 2nd gen Alto model) in June 2019. When Alto was launched, one Dollar was equal to Rs 164 while Alto was priced between Rs 9.99 lac and Rs 12.95 lac.
However within the next 6 months, its prices already witnessed up to three major revisions, and by January 2020 Suzuki Alto was priced between Rs 11.35 lac and Rs 15.98 lac. Interestingly, the Rupee by then had recovered its value and was being traded at Rs 154 against a Dollar.
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This meant that for a 6% reduction in forex value, the prices of Alto variants were increased by up to 27%. This happened simply because the Alto was the only mass-produced car in Pakistan with a somewhat relatively lower price tag since almost everything else had already touched Rs 2.0 million price barrier and was going out of reach for many.
Throughout its 4 years of presence in the market, the popularity of Alto kept increasing only due to inflation & shrinking purchase power of the masses. Buyers of B-sedans started to opt for Alto since it was the cheapest & most fuel-efficient as sedans went beyond the purchasing power of the middle-class people.
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Things went haywire since last year as local currency saw a record decline and is now being traded at around Rs 288 against a Dollar. Today the Alto is priced at Rs 22.51 lac for the base VX variant and goes as high as Rs 29.35 lac for the top-spec VXL AGS variant. A 660cc entry-level hatchback being sold for Rs 3 million and adding on-road price which also includes premium/ on-money, the price of Alto goes beyond Rs 34.0 lac for the end-user.
According to reports, dealerships are charging up to Rs 375,000 on money/ premium on Alto since due to non-production days, the demand-supply gap has intensified and more & more people are now shifting their attention towards Alto as even a car as basic as a Suzuki Cultus has now breached Rs 4 million price barrier.
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The impact of this is evident in the used car market too. If we look out for Alto models from 2019, when the car was launched in Pakistan, the price of 4-years old used Suzuki Alto with more than 40,000 km on the odometer, is as much as 150% of its original invoice price.
Pak Suzuki has already announced four price revisions within the first 4 months of this calendar year. And looking at the trend, it’s likely that the company will announce another couple of price revisions before the end of this fiscal year & before the new budget is announced. Sales of locally assembled cars are already been cut to half while the successive price revisions will do nothing but further dent the sales of new vehicles.
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Alto is the only mass-produced car left in Pakistan that is being sold in somewhat decent numbers. Despite witnessing a 43% drop in sales, the 9-month sales of Alto during the current fiscal year stand at 30,744 units (it was 53,241 in 9MFY22) more than any other locally assembler vehicle. But it remains a fact that we are now buying Suzuki Alto 660cc for the price of a Honda Civic Oriel from a few years ago!
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
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