Why Indus Motors decided to close down for a while and how it is the only one to be blamed

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Although government had announced late last year that the automakers should prepare and switch over to Euro-II emissions standards by July 2012 however, Indus Motors was short-sighted in making the necessary change to bring Corolla to match the Euro-II standards and thusly, had to increase the prices overnight when the deadline of July to switch over to Euro-II standards had passed and companies hastily switched over to the new Euro standards which sent the customers, who had booked their cars on pre-increase prices, into a shock from which 1800 customers decided not to return and asked for a complete refund.

The point here to understand is that Indus Motors does not begin assembling a car unless it is booked, so once a customer has booked their car, Indus Motors begin to assemble it but when they increased the prices overnight, customers weren’t happy and wanted a refund although the cars were already built and shipped.

Indus Motors had to entertain the refunds because customers had booked on prices long before the 75,000 PKR rise came into effect and there was no way, anyone was willing to pay the increased difference to Indus Motors, and dealerships had to return 1800 cars back to the factory.

What exactly did they change to bring their cars on Euro-II emissions standards?

Nothing! Because the Corolla in Pakistan is the same car available across the world, even in countries where they are using Euro-IV or V standards, because of this diversity in emissions compliance standards, automakers develop one engine for the world but to match the emissions standards practiced in the world, they only add or subtract or use a inferior or superior catalytic converter according to the emissions standard requirements of the respective country.

So did Indus Motors as well. It added only a catalytic converter which had been lying in the factory for a long while since the day Government had announced that local auto assemblers move over to Euro-II standards. And when Pak Suzuki switched to Euro-II standards before Indus Motors, and the later being the leading in luxury (sort of, in Pakistan), had to do the same very fast.

Technicians went in the warehouse, came out and fitted all Corollas with Catalytic Converters and the management consequentially announced the increase of 75,000 PKR the other day.

The unhappy customers didn’t want to pay the extra 75,000 PKR and since Indus Motors had not warned them beforehand, they had to entertain the refunds sending 1800 units produced back to the factory.

With 1800 units returned, Indus Motors could not continue on producing more units, and had to empty out the lot (returned) first.

The company has been completely shut for eleven days and it began producing for a few days after which, it will again shut down indefinitely in few days according to our source who works in Indus Motors.

Coming back to the case of Catalytic Converters and the 75,000 increase in price, we did a little research and tried to look up the actual price of a Catalytic Converter for the Corolla so we can justify the price and, we haven’t been able to.

Although we couldn’t find the price of OEM (Original Equipment Manufacturer) Catalytic Converters since we didn’t had the part code, but we did found Catalytic Converters made by various after-market manufacturers, such as Magnaflow who also make products for companies such as: Lamborghini, BMW, etc.

The price? According to our google results, the after-market Catalytic Converters for 2012 Corolla made by Magnaflow was priced at 235 USD, converted into Pakistani Rupee, its comes around at only 22,000 PKR. Only 22,000! And the price increase is 75,000!!!!!

It isn’t justified at all, because, as you all know, bulk buying which such big manufacturers do will bring the OEM Catalytic Converters even cheaper.

If you know the actual price of the Catalytic Converter fitted in the Euro-II Corolla, than leave the price in the comments below with a source.

Moreover, Indus Motors had been producing and selling in record numbers this year (2012), even though Suzuki has had a blow but Indus Motors kept on improving on sales until they increased the prices and customers didn’t accept those prices which resulted in 1800 cars being returned and thusly, forcing Indus Motors to shut down so they can sell those 1800 cars before they start producing more.

Indus Motors improved its sales by 13% owing to higher sales of Corolla, the country’s highest selling car. Corolla sales jacked up 17% in April amid launch of new variants by the company in its 1,600cc segment.

May, 2012 Tribune

Indus Motors’ management’s short-sightedness is only to be blamed for the 75,000 price increase and the closure of the company as they didn’t respect and follow the government’s order passed last year.

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19 Comments
  1. Zain Lucky says

    500 rs

  2. M Zeeshan Izhar says

    I will ask the high court of pakistan to take strong and firm action against these Automakers who are looting people selling on very high profit, and to do a detail investigation on the prices of the car. Or to completely ban these companies if they don't follow the orders and let the import of upto 20 years old car open again to break their monoply.

  3. Usman Azam says

    Main reason they want to clear out their lot is that they are planning to launch redesigned corolla 2013, For doing that they need some changes in Assembley plants and are waiting for parts to be delivered as corolla 2013 will employing new Engine and Transmission along with newly designed Chasis and body.

  4. Gohar Waheed Bajwa says

    Is the story true bro?

  5. Usman Azam says

    You will find the facts soon.

  6. Rai Ali Raza says

    I want to ask the article writter to help me understand that with this shitty piece of corolla that is built in pakistan why was the engine turned into 1.6 instead of the usuall 1.8 when the price is same for corola altis , I paid 2 million for a corola altis and got 1.6 engine instead 1.8, why was this done even with the increase in the prices 3 times since the last year. There should be a regulatory authority for auto manufacturers in pakistan just like PTA with toyota suzuki and honda in pakistan we are fishy in the barrel no body wants the locally manufactured cars becus cars manufactured in japan despite being atleast 3 to 5 years used are still way way much better in every aspect a good car. Please do comment and help understand the scenario.

  7. Jaffar Hussain says

    Well said Rai Ali Raza except for a few language mistakes of course.

  8. Murtaza Shahid says

    U don't have to right a blog about the same thing again and again :S , PS: Are you sure they closed the plant due to low sales, Do u have any official stats about it? Paksuzuki always shuts its plant in summers every year for the maintainence of on there plant.

  9. Rohail Malhi says

    Noone is going to Challenge Car Manufacture Mafia………. They will give money to sectaries and have policies that suits them…… If anyone is serious let only one Chinese company make their factory in Pakistan and we will see how they are going to turn this Mafia upside down.

  10. Rai Ali Raza says

    u know i m an idiot and not an English literate so y ask ,, u should ignore me on the accounts of linguistic mistakes.

  11. Yassir Choudhry says

    Admin
    try to investigate also why Hyundai dewan closed their production in PK?

  12. Khalid Malhi says

    They the Baboos(blood sucker) will never let this happen they are main cause of destruction,chaos in this country the other day i heard Ogra chief gave 36 billion illegally by means of white collar crime to one single company, they all are leechs dfying the law and the supreme court.

  13. PakWheels.com says

    We've heard that they'll be back when the current governments goes out. Dewan is not in good term with Pres. This is what we've "heard".

  14. Muhammad Ashab Hanif says

    Sir it will cost free as when we will adjust the bulk discount & old catalyst. The net price will come to as close as 0 (zero).

  15. Yassir Choudhry says

    SAME LISTENED HERE

  16. Haris Khan says

    dewaan motors stoped their production due to disagreements between the companys owners

  17. M Omar Khalid says

    President Asif Ali Zardari wanted a share of total 35% from Dewan group which makes upto Kharab's. As Dewan group includes BMW, Hyundai, Kia, Mitsubishi, 4 sugar mills, x steel mills etc.

  18. Saad Hassan Saeed Qureshi says

    so sad i wonder what isi is doing?

  19. Changez Khan says

    First of all we thank Pakwheels for their information and advices on Toyota Indus Cars in Pakistan and it’s benchmarking. Seeing the above article it’s not a surprise for us as clients of Toyota but we see Indus Motors continuously cheat and deceive Pak diehard Customers for many years now. I am a Doctor working overseas and a regular buyer of Toyota and Honda. Both these manufacturers in Pakistan are cheating customers every now and then increase unjustified prices for no quality compared to benchmarks outside Pakistan. I used to hear whenever Govt or Federal Minister’s for Industries or Production announce on behalf of public demand to reduce prices of these cars in Pakistan then what happened was that Indus or Honda Management Manufacturers would bribe these Minister’s and their families to keep them silent

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