Shrinking auto sales force price reductions
Lucky Motor Corporation (LMC) ceased booking for the KIA Stonic Ex+ after it was overbooked, following a reduction in price of over 1.5 million. Additionally, Pak Suzuki Motor Company (PSMC) lowered the prices of three Swift variants by up to Rs710,000 due to market conditions and dynamics.
The reduction of the KIA Stonic EX+ price to Rs4,767,000 led LMC to halt bookings, which had been selling rapidly following an enthusiastic response from customers after the company’s offer on April 29.
‘Since April 29, when we announced an exciting limited-time offer to our customers in celebration of five years of Completely Knocked Down (CKD) operations of Lucky Motor Corporation (LMC), we have received an overwhelming response from our customers towards booking the KIA Stonic. As a result, we are fully booked for deliveries up until September 2024 and will start delivering vehicles to our customers from May 2024 as per sequence. All bookings taken for delivery in September 2024 will be accepted only on partial payments of Rs2.35 million. Depending on the market response and considering our stock situation, we will start taking further orders for October 2024 and onward delivery commitments. Communication regarding this will be done separately,’ LMC said in a statement.
Many customers remained disappointed due to being unable to benefit from the attractive offer and raised concerns and doubts about the sudden halt in bookings for the KIA Stonic EX+. Various unconfirmed reports suggest that the company witnessed lacklustre sales, with dealers themselves quickly booking vehicles, the government engaging in a purchasing spree, and reportedly discontinuing the specific model.
When contacted, a company officer familiar with the situation rejected market reports, while admitting that sales of this model had slightly declined. However, he stated that it is a popular model and the hatchback’s price had gone out of the range of some customers, prompting the company to reduce the rate to accommodate all customers. The company expected a 10% rise in sales of this model, but sales surged to 50%, he said.
Macca Motors Kia Dealer Fasih Naveed stated that booking is temporarily stopped, and the company will resume it soon. He assured that there will be no discontinuation of the model as the company will inform customers of the new strategy.
Auto sector expert Mashood Khan stated that shrinking auto sales are forcing companies to reduce prices. ‘Until the government and Original Equipment Manufacturers (OEMs) sit together to formulate a consistent and long-term policy, the industry will continue to face challenging times. A significant decrease in sales volumes is detrimental to both industrialists and citizens. Closing industrial units will lead to more unemployment and subsequently, a higher crime rate. The OEMs must provide a localisation plan for parts manufacturing, and the government should decrease taxes. It will be a win-win situation benefiting customers. We should adopt a policy where one-part localisation equals a 1% tax reduction, two-part localisation equals a 2% tax cut, and so on. Such policies will energise and revitalise the struggling industry. Prices of autos have become unaffordable for middle-class customers as sales volumes continue to decline.’
Meanwhile, considering the prevailing market conditions and dynamics, PSMC announced the promotional retail sales prices of Suzuki Swift effective May 01 following a limited-time offer. Prices of Swift variants including GL MT, GL CVT, and GLX CVT fell to Rs4,336,000, Rs4,560,000, and Rs4,719,000, respectively, reflecting decreased prices of Rs85,000, Rs159,000, and Rs710,000.
`’We reduced prices of all Swift variants, but only for a limited time due to economic stability, as no fluctuations in the local currency are witnessed, and the government and Special Investment Facilitation Council (SIFC) continue to implement better policies. Moreover, the government has not imposed any new or additional taxes. This is favourable for the industry,’ said PSMC Head of Corporate Affairs Shafiq Ahmed Shaikh.
Provided by SyndiGate Media Inc. (Syndigate.info).