Prices of Honda cars increased, premium exists

[Lahore_Real_Estate]

By Aamir Shafaat Khan
Saturday, 20 Mar, 2010

Due to the increasing demand for cars, dealers are openly charging premium from customers who want spot delivery. Premium on Toyota Corolla XLI and GLI ranges between Rs40,000 to Rs60,000. Premiums on Suzuki cars ranges between Rs10,000-30,000. - File photo
KARACHI: While there is no let up in the premium on the sale of locally assembled cars, a leading car maker has hiked price by Rs20,000-35,000 to be effective from Saturday.

The makers of Honda cars announced the price hike in the wake of yen appreciation against various currencies, making imports of parts and accessories expensive.

Honda City (manual and automatic) prices have been raised by Rs20,000 and Rs30,000, while for Civic (except Vtec manual), the rate has been enhanced by Rs30,000-35,000 on other versions.

On March 3, Pak Suzuki Motor Company Limited (PSMCL) had raised the price of Swift by Rs50,000 to Rs1,049,000 from Rs999,000, while Indus Motor Company (IMC) had pushed up the rate of Toyota Corolla XLI by Rs20,000 and GLI and above 1,800cc by Rs30,000 on Feb 23.

According to figures of Pakistan Automotive Manufacturers Association (PAMA), the production of locally assembled cars has soared to 74,871 units (excluding Suzuki Bolan) in July-Feb 2009-10 from 56,485 units in the same period of last fiscal. In February 2010 production has risen to 9,857 units from 5,733 in the same month of last year.

Authorised dealers are openly charging premium from customers as many of them cannot wait for delivery period. Premium on Toyota Corolla XLI and GLI ranges between Rs40,000 to Rs60,000. There are also reports that some dealers are demanding premium of Rs85,000 on Corolla GLI. On Suzuki Mehran dealers are quoting Rs20,000-30,000 and on Alto, Cultus and Swift, premium hovers between Rs10,000-20,000.

In the second week of this month, Indus Motor Company (IMC) had asked the consumers to say no to premium and wait for the delivery of their cars as the company is continuously increasing its production to meet the demand.

The company has undertaken measures to deliver vehicles to genuine customers and continues to battle the menace of investors capitalising on market dynamics.

IMC has urged the ministry of industries to implement suggestions of mandatory registration for six months or heavy transfer fee in case of ownership changes within the first six months of purchase of vehicle to curtail the market malpractice of premium.

For the last few months, the ministry has been taking up the matter regarding price hike, premium and quality with the assemblers very lightly. These issues may hold no interest for the ministry, which is now engaged in pre-budget session with the assemblers and parts makers. Senior general manager Marketing PSMCL, Ashfaq Hussain, told Dawn that there might be few authorised dealers, but majority are not involved in charging premium from the customers on spot buying. The company has already warned its dealers to stay away such ‘unfair practice, otherwise strict action would be taken.

He said some consumers, claiming to be genuine, are also lifting cars and selling them on premium. He said that many investors, middlemen and speculators have also entered the auto market.

He said the company has already enhanced its production to 7,000 vehicles per month from 4,000 in Dec 2009. A media campaign was also launched asking customers to directly contact the company in case they face any problems at the showrooms. The average delivery period of vehicles is four weeks now, he claimed.

Mr Ashfaq said the demand for cars has increased substantially due to three reasons – surging rural buying in the wake of good crops of cotton, wheat, rice etc, 17 per cent rise in home remittance to $5.786 billion in July-Feb 2009-10 and slight improvement in sale of cars through bank leasing to 25-26 per cent from 20 per cent few months back.