The economy is slowing down and the inflation rate is also increasing, Pakistan rupee is continuously devaluating which is bringing customers to buy used cars in Pakistan.
Pakistan Auto Sector is growing but due to increased manufacturing costs, it is expected that the prices of new cars in Pakistan will increase soon as the auto manufacturers have already announced to increase the prices of their vehicles.
From only three auto manufacturers initially, which had their monopoly in the market, many new companies are coming to this playground and many of them have already started their fight here, which is giving the consumer more choices. This is breaking the monopoly of previously existing auto manufacturers which were Toyota – Indus Motor Company, Suzuki Pakistan, and Honda. This will also force to think these automakers to devise the Price of Toyota and the Price of Honda in Pakistan
Current Scenario
Several developments negatively impacted the auto manufacturing industry in the past several months. The devaluation of the Pakistan Rupee has also affected the stacks of auto manufacturers. The cost of manufacturing is increased, therefore; auto manufacturers are unable to produce vehicles at lower prices. Their cost of manufacturing is increased that’s why they are planning to increase the prices of their vehicles in the market. This will ultimately affect the end-users. All burdens imposed by the govt. on the auto, the manufacturer will be ultimately beard by the end-user. Because increasing manufacturing costs will result in increased vehicle prices and the buyer will have to pay more as auto manufacturers will not spend from their pockets.
The rupee has lost its value in the past several months increasing in price of imported raw materials and ultimately increasing in total manufacturing cost. This will increase the final prices of the vehicles and decreasing in the purchasing power of the consumers.
Recently some auto manufacturers have stopped production due to a decrease in demand. The demand for newly entered vehicles has increased. Things may be gone worst from bad for the three existing Japanese auto manufacturers, but the new entrants in the market are becoming the actual gainers of the situation as they are giving more options to the consumers in the same price slab.
Used cars in Pakistan
There are some reports which are showing that the used cars or second-hand cars segment is now seeing growth in Pakistan. The report says that now the consumer is more attracted to secondhand or used cars in Pakistan. There are multiple rounds of devaluation of Pak Rupee due to which the new cars are going above the buying limits of end-users. Consumers are constantly demanding cheaper and used cars.
Prices of used cars have also increased because the used car owner normally lists the price of his car according to increase or decrease in the price of new cars. We can say that the Prices of Used cars in Pakistan depend upon the New Car Prices in Pakistan. However, the sales of new cars have decreased due to an increase in the prices of new cars and also due to new vehicle financing policy and new Import policies imposed by the government, and also due to inflation and devaluation of money in the past several months. Within the segment of the used car, the demand for older used cars is comparatively higher than the newer used cars.
We can see that basically, the problem is with the supply, but not with the demand. Because currently the deliveries of all vehicles are delayed for 3-4 months at least.
Buyers
There are many types of car buyers in Pakistan. Many buyers buy the vehicle as their income source. They buy the vehicles to drive as taxis like Uber or Careem. This is also the reason behind the big sales volume of Suzuki Wagon-R. These users normally want to invest a minimum to start their income source. That’s why they go for the buying of low price Used Vehicles. They buy used cars instead of new cars because these cars are most affordable for them.
Industrial Remarks
Industry owners say that govt. has imposed many taxes on the vehicles and due to inflation, the prices of new vehicles has increased. This results in the reduction of purchasing power of end-users.
Remarks
The reason behind the increasing sale of used cars is that the new cars are going above the budget of end-users. The reasons are inflation, Devaluation of Pakistan Rupee, Increased taxes, Hard policies imposed by govt and many other controllable reasons. Govt. must have to pay attention to this problem that a middle man is no more able to buy a new car for his family. There must be some reforms to be made to make it possible for a low-income person to buy a vehicle for his family.
