For decades, Suzuki Mehran and Bolan have been ridiculed by local car buyers and enthusiasts for their sub-standard quality (in the built, the features—comfort, safety, security—as well as the drive of the vehicles), but for the same number of decades, more and more consumers have continued to purchase these cars. To date, Mehran remains the most sold car in the country. Meanwhile, Bolan serves both commercial and domestic purposes whether it is used as a school van, an Edhi ambulance or catering to a large family. In the government and private sector, these cars are often the first vehicles given to officers on promotion. Mehran is now being replaced by the new Alto 660cc, and true for form, the excitement is palpable.
And the excitement is palpable despite the lowest variant of the car that comes with just an engine and basic features costing more than Mehran, priced north of Rs900,000. Mind you, Mehran prices have been raised over the past two years—going up by nearly 20 percent or Rs150,000. Even at that price, Mehran cost cheaper. The upper lock on the Alto variant is Rs1.29 million. As predicted here, the vehicle is priced closer to Suzuki Wagon-R VXL which currently sells at Rs1.34 million.
Whether that price is justifiable or not is inconsequential. And there are three reasons why both Mehran then, and Alto now will continue to find consumers who will buy these vehicles instead of some of the better imported vehicles or upcoming local vehicles in similar price ranges. First is a very strong presence of these cars in the after-sales and parts market which is not only accessible across the country at every nook and cranny but also affordable. Nothing can beat a vital after-sales market. Maintenance of these cars is cheap.
Secondly, Mehran then, and Alto now are cheaper than any other domestic or imported cars. Higher duties and taxes on imports—new as well as used—ensure that even cars that could cost substantially less cannot compete with them. That is not to say that taxes don’t play a role in Mehran and Alto’s price determination. By several estimates, taxes constitute between 25-30 percent of the price of an average car in Pakistan.
Third is the market perception and to a great extent market size. Since the market size is so small, car penetration in the country is dismally low, and consumers have had limited experiences with only a handful of domestic and international cars. Many of the imported variants remain untested to the market and many brands remain unknown. The fact that the market has not been introduced to new technology and new models, and there is always a fear that a) maintenance would be difficult without the availability of spare parts b) the car will not have good resale, consumers remain in the safe zone. If they are putting a million or so rupees in a mid-income car out of their savings, they better be safe than sorry.
Experts believe that Alto is a good car for the Pakistani market since it gives a fuel average of 20km/litre which is pretty high. Mehran had a fuel average of 10-15km/liter (lower if the air conditioning is on). In times when fuel prices are going up, and austerity is already reducing disposable incomes, Alto would be a reasonable buy. Except, that will be because of the lack of choices. Even compared to the Japanese imported Alto, the Pakistani Alto lacks several safety and security features found in the former.
The current economic conditions—with prices up, incomes down and cost of borrowing also rising—are not ideal for car purchases. The sales numbers can be used to gauge the likeability of the car but these economic circumstances will certainly skew the results. Even so, it is clear that while Alto is entering a tough market right now, for genuine car buyers, it will be a top contender for the purchase, never mind the charges against it.
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