Local cars selling at premium on strong demand

At a time when 20 women died in free ration queue stampede and millions are still making lines for procuring 10-kg flour bag at Rs100, many cash rich people are on a hunt to purchase new locally made cars even at premium prices.



The demand for local cars has surged ahead of Eidul Fitr and authorised dealers are charging premiums on spot buying.



Around 80 per cent of the local cars are now sold through cash while bank and leasing finance holds 20 per cent share. Due to 19-21 per cent mark-up people are not opting for car financing.



After having reaping bumper rice and wheat crops, growers have also joined the race to get locally made new cars at any cost.



Overseas Pakistanis remitted record $780.5 million in August while the country had received $7.811 billion remittances in 2008-09. These inflows usually find way into some investment avenues like property, stocks, currency, gold etc. Now many investors have also entered in the car business thus creating an artificial demand.



Market sources said that authorised dealers were charging Rs15,000-Rs20,000 premium on Toyota Corolla XLI and Rs50,000 on its GLi model. Premium on Suzuki Mehran ranged between Rs10,000-15,000 while on other models it hovered between Rs25,000-30,000. Premium on Honda Civic Oriel was Rs60,000-Rs70,000. On Daihatsu Cuore dealers were demanding Rs10,000-15,000 premium.



As the delivery period for Corolla Xli and Gli is one month and two months respectively, buyers are paying on-money for ready delivery.



The old cars have also become a hot item before Eid. Due to massive decline in imports of used cars, people have gone wild for very old model cars especially from 1986 onwards.



There is a marked difference in the price of car models from 1986 to 2008 models if compared with earlier this year. Steep rise in prices of locally made cars can also be blamed for pushing up price of used cars.



Used car dealers are demanding Rs375,000-400,000 for 2005 Alto AC/CNG while it was available at Rs350,000 earlier this year. Alto 2003 is available at Rs370,000 as compared to Rs320,000-340,000. Alto 2001 is selling at Rs320,000-325,000 as compared to Rs290,000-300,000. Mehran 2006 AC/CNG is available at Rs325,000 which was easily selling at Rs275,000.



Dealers were demanding Rs325,000-340,000 for Suzuki Khyber 1997-1998 model which was available at Rs300,000 earlier this year. The 1992 Khyber is being sold at Rs190,000-200,000 while it was sold at Rs160,000-170,000. They were demanding Rs150,000 for Mehran 1992 as compared to Rs120,000-130,000. Suzuki Cultus 2004 is sold at Rs450,000-475,000 as compared to Rs400,000-425,000.