Auto Policy 2016-21 which is nearing its conclusion has allowed many new players to explore the Pakistani market. Consumers saw availability of several new brands in a market which was long dominated by Suzuki, Toyota and Honda only.
The primary objective of the implementation of this policy was to break the monopoly of 3 Japanese companies (aka Big 3) in the market, generate healthy competition between players, shorten the delivery period, eliminate own/ premium, increase localization, bring down car prices and improve the quality of products offered to the customers.
Related: 4 Years of Auto Policy 2016-21
However, even though many new companies emerged on the scene, one may still argue that the majority of what is being launched has been primarily targeted towards those with strong purchasing power. While the delays in deliveries as well as own-money still exists, increase in localization remains a question mark and the mass majority of buyers are still dependent on Big 3 products since nothing much has been introduced in those segments.
This is mainly because most newcomers are preferring to dodge the competition by not introducing products that go straight against the established players, and the easiest option is to launch the crossover SUVs which are not only getting popular in most markets around the world, but offer good potential for the businessmen to earn healthy profit margins compared to conventional mass market sedans or hatchbacks, which are bound to face stiff competition from existing options.
It all seems nice if one can spend around Rs 5 million & more on a new automobile, that too a fashionable crossover SUV equipped with latest gadgetry and an imposing road presence but there are a few problems associated in making such a decision.
We receive a lot of emails & messages on our social handles from people who raise valid concerns regarding opting for these new vehicles, and want us to write about it. So we would like to compile these concerns here which seem quite genuine to us. Do share with us your opinion in the comment section below in order to generate a healthy debate.
Why should I go for an unknown brand instead of a trusted one?
A lot of people are concerned about the brand image. Despite the fact that existing options by Big 3 are considered as under-spec & overpriced, the performance and availability of spares that ultimately generates an ease of maintenance is something that’s hard to beat for any newcomer, at least for a few years.
Related: Are Big 3 Really in Trouble?
So establishing a brand image is important, and because of which most people are reluctant to pay a huge sum of money (say Rs 4 million or more) on new & rather unknown brands as far as our market is concerned.
Question mark on after sales support
The key to success for any new car in any market is its after sales support. Most newcomers in our market lag far behind in this area. They might have opened showrooms displaying glistering new vehicles but the after sales support and the availability of spares is next to zero.
A user shared his experience of his brand new crossover which got involved in an accident but the dealership had no backup support of the needed replacement parts. Another person got the multimedia unit of his new crossover stolen, and that too was not available at any dealership.
Showing CBUs to deliver local assembled units
I was invited by a newcomer which had launched a crossover SUV earlier this year, although the company is yet to begin delivering units. While at the dealership I saw at least 6 potential customers visiting the premises, some even came along with families, and most of them raised the same question: “Kiya local assembled ki quality bhi aisi he hogi?” (Will the locally assembled ones have the same quality standards as the imported one?)
While the sales person tried his best to convince the customers that the locally assembled vehicle will bear the same quality as the CBU display unit, however, most customers refused to accept that argument. One person who arrived in a brand new white Honda Civic pointed towards his car which was seen standing outside from the glass windows of the dealership: “Jab ye 46 laakh mai sahi cheez nahi dey saktay to aap kese day daingey?” (If THEY are unable to deliver quality in PKR 4.6 million, how will YOU do it?)
This is a fact that for years, the local assemblers have failed to give us international quality standards in their cars which are known as the most basic vehicles devoid of any modern features & functionality, despite the principal companies being ranked among the top automakers of the world. Then how come those with no history of putting together an automobile will be able to produce acceptable quality standards in modern expensive crossovers which are loaded with latest technological gizmos and driver assistance systems?
Related: The Bubble Launch of Proton Saga
In a market where established players are unable to even properly align tail lights, expecting newcomers to produce international quality standards is indeed a very tough & unrealistic ask.
Taking bookings when nothing to deliver
Also, most people are infuriated with the fact that companies take advance payments in the name of bookings, but have nothing to deliver. This was also recently highlighted by renowned journalist and president of SAMAA TV, Mr Nadeem Malik who lambasted assemblers for collecting advance money and letting the customers wait for over 6 months for the delivery. He called this act as an ‘organized plunder.’
No rigorous testing
It’s a general practice for automakers to test the local conditions before launching a new product in any market. Testing road, fuel & climatic conditions play a vital role in the performance of any car. While few automakers have done this practice, many newcomers have just imported a lot and put the vehicles on display.
There are many flashy expensive crossovers out there which aren’t probably tested in local conditions hence their performance in local conditions might become a surprise for the owners who paid a hefty price to get hold of one.
The resale factor
Most people raise concerns over resale. Believe it or not, this is still the most important factor for most car buyers out there. The ability to easily sell the vehicle at a decent price, gives the majority of consumers an ultimate peace of mind.
The price gap
In order to penetrate the market, newcomers were expected to price their cars lower than the competition. However the majority has put a price tag that exceeds our expectations, in this scenario it is quite hard for people to convince themselves spending a huge amount of money on such crossovers with no proper after sales & backup support.
Here the strategy of Kia or Hyundai is much appreciable since they underwent extensive trials & tests to suit the local conditions and entered the game with local assembled units right from the beginning.
This is the age of internet & social media and customers are mindful like never before. While competition is good, people tend to go for something which offers them better value for money with prompt deliveries & backed by proper after sales support, which is a good sign.
More than 9 crossover SUVs have so far been introduced in our market within the last couple of years and at least 5 more are expected to be introduced in near future. So there will be a lot to choose from as far as the available options are concerned, but based on the above concerns it will always be a sensible decision to go for a quality brand with proper after sales support rather than flashy imported products with several years of warranty on papers but no on-ground support and a huge question mark on local production & built quality.
If you are supposed to go for a crossover SUV, which one will you prefer & why? Do let us know with your comments.