Even Upcoming Elections are Unable to Pump Up SUV Sales in Pakistan

In contrast to the last general election held in 2018, politicians have yet to purchase SUVs and 4×4 pickup trucks, primarily double cabins, for use in public gatherings and rallies, indicating not only a lack of enthusiasm but also outrageously expensive pricing of such vehicles.

Overall sales of locally manufactured vehicles including 4x4s & SUVs have already been on a downward trend due to several reasons including restrictions on opening letters of credit (LCs) imposed by the State Bank of Pakistan to reduce the current account deficit, resulting in frequent temporary plant shutdowns due to a lack of parts and accessories. Other factors include expensive & stringent auto financing conditions, ridiculously high car prices, rising inflation, and reduced purchasing power of the masses.

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The sharp increase in the cost of locally produced cars has further deterred consumers who might otherwise overlook growing food inflation, power bills, and other ongoing expenses. Local assemblers are now complaining that high prices are discouraging the wealthy from purchasing expensive vehicles, which is detrimental to their business and sales of goods.

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Political leaders contesting the general elections and even a rich candidate usually lead election rallies on SUVs and double cabin pickups to muster the support of people. A sales pattern ahead of the July 25, 2018 elections reveals an uptick in sales of 4,299 units of Toyota Hilux during January-June 2018 from 3,171 units during July-December 2017. Similarly, Toyota Fortuner sales increased to 2,548 during January-June 2018 from sales of 1,638 units during July-December 2017.

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After the start of releasing combined data of Toyota SUVs and pickup by the Pakistan Automotive Manufacturers Association (PAMA), total sales of Fortuner and Hilux vehicles during July-November FY24 nosedived to 1,789 units from 5,298 units sold in the same period of 2022.

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Expressing surprise over very limited sales of Fortuner and Hilux Revo double cabin vehicles ahead of elections, a Toyota dealer said “We are just waiting for the buyers to come.” Citing the extremely high prices of these vehicles compared to 2018 prices as one of the main reasons, he said both the vehicles are ready for delivery within two days. “Currently 99% of buying of Fortuner and Revo is being done in cash instead of leasing through bank financing,” he added.

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When asked if buyers have been waiting to purchase the recently launched locally built Toyota Cross Hybrid Electric car (HEV) rather than the Revo and Fortuner, he answered, “I think Cross HEV may not prove to be an election-driven vehicle when compared to powerful petrol and diesel driven SUVs and pickups.”

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According to sources, secondary sales at used car showrooms must be holding a substantial amount of expensive cars with invoices older than 6 months to a year, but primary sales at authorized dealerships are reportedly extremely low. Since many used car dealers also buy new cars from the authorized dealerships of local automakers, owners of used car showrooms stand to gain greatly from the rising prices of used cars, especially for those that they bought at a lower price in the previous six months to two years.

However, according to Automotive Traders and Impor­ters Association (ATIA) Chairman Mohammad Kamran Khan, sales of used and even new vehicles like double cabins, 4x4s and pickups remain depressed. “Sales usually kick off two months before elections but currently the demand is very slow,” he said, adding that perhaps people are waiting for the year’s end due to the change of model year. ATIA Chief Coordinator Aijaz Ahmed said high prices of both new and used vehicles coupled with uncertainty about elections have also created doubts among buyers of election-related vehicles.

Source: Dawn

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