I wrote something on pakwheels facebook community group. Sharing it here below..
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“ MANSHA KI MANSHA “
Hyundai Santa FE; The model Hyundai don’t want to sell.
A “SHUT-UP” call by Hyundai Nishat Motor (Private) Limited.
If you have been following this group, by now you should be aware and already in shock. If you have not experience the shock yet, you can feel it here at your own risk > https://www.facebook.com/groups/PakWheelsOfficial/permalink/2161409707307674/ ]
There was a lot of craze and people were anxious about what Hyundai going to introduce as their first vehicle. I am sure every other person looking for something different than Toyota, Honda or Suzuki is anxiously waiting for something different. On Feb 23rd, Hyundai revealed two vehicles; A Hyundai Santa Fe and a 12 seater van Grand Starex. I will briefly focus on Santa FE only.
Lot of people after listening to the price of Santa FE which is set at “18500000/- [18.5 Million] has already decided and declared that Hyundai need to pack up their bags and they are already going towards failure before even becoming fully functional as a new entrant. Well Hyundai-Nishat never wanted to sell Santa FE to general public like you and me at the first place. If it’s revealed, it’s just to show public that the company is not dead and coming to operate in near future.
At launch event Hyundai-Nishat representatives were calling the Santa FE as premium model and declared it and introduced it like its above all others in the market.
Well so, is it a premium brand and premium model?
NO sir! It’s not.
The company just wanted to declare itself above others and show to public that our product is better and it will be costly as hell or heaven whatever you call it. Hyundai is just an italic “H” and it competes with straight legged “ H ” and “ T ” and they have to price themselves accordingly in our market precisely and realistically.
So, with 18.5 Million of price for Santa FE, who is going to buy it? Do you think it will not sell like many people are predicting? So, let me tell you an interesting thing. From the showroom floor on the same day of reveal at Emporium mall, the news is that all vehicles in stock are already sold out and if you need one you have to book with many many millions deposited upfront and it will take Hyundai at least 3 months to deliver.
Hyundai, KIA are in CAT- A status for development of new plant and have been given 50% subsidy on duty for 100 CBU units of each models and variants for marketing and launch purposes till 2021. KIA introduced the Carnival van under same clause and that is why the price is much less as it’s attracting very little duty. KIA also imported Carnival under commercial vehicle class which has further reduced the overall duty on it.
Santa Fe is offered in many countries in many variants and engine options. The one offered for sale in Pakistan is still not a loaded version. Anyways let’s forget about any duties / taxes, overheads and profits for a moment. Assume an average price of $USD-35,000/- which converts to around PKR 4,900,000/- . The sale price of PKR 18.5 Million means around $ USD-132,500/- . The difference of $USD-97500/- . The duties on imported models are very high but if you put the 50% subsidy on duties in equation for the first 100 units, the price should have been way different. But what we are seeing here is the price bumped 4 times instead of being somewhere below 8 Million.
So, Hyundai-Nishat is making a lot of profits? Question is what happened to the 50% of subsidy on duty? Why such a high price of 18.5 Million for the CBU [Completely Built Unit/ Import]. Was that discount on duty has not been applied? . So, where all the stock go? How many units were in stock? And how come all units are sold when the vehicle is just shown in Lahore and it’s sold out already?? Fishy Fishy ..
Sir, I am sure the 50% reduction on duty and subsidy has been availed. Hyundai-Nishat has imported the vehicle at lower cost. The company has imported vehicle for launch and marketing purpose but they are just keeping it for themselves. The company imported vehicle at reduced cost and most probably just distributed it among their own contacts, family and friends and within Nishat Group.
If we assume today that there is no subsidy, even then a $35000 vehicle sold at price of PKR 18,500,000/- after import does not make sense at all. Marking up the price skyrocketing high is only bringing a bad image to the company and also making us think how they will price their locally assembled vehicles in next year and so by calling themselves "Premium".
Honda, Toyota are importing vehicles as CBU with almost same engine displacement and around same price point in international market but after import their prices are not that jacked up as we are seeing in case of Santa FE. Camry, Accord, CRV examples are in front of you as far as prices.
Santa FE is priced almost as much as a premium model like X5, Q5 are priced in Pakistan which in fact cost twice of Santa FE internationally. As for Santa FE will not be locally produced and will remain as CBU in future as well, pricing it that high means Hyundai in fact don’t want to sell it at all if they are keeping such a price.
Nishat-Hyundai revealed the vehicle to public and reflected that they are offering a vehicle but priced it so high that anyone in the market, a general pubic could not even talk and ask about it as far as buying and even showing an interest in it. Basically instead of selling it to public at subsidized rate, they are enjoying themselves that subsidy.
I am not a legal expert and can’t say anything about the legality of it what they did or doing or might be doing but I think it is an unethical practice. I think these units should have been sold to public instead of distributing among themselves which I believe will be happening. Personally I think it’s an unfair and deceptive practice. The benefit should be passed to the public. Otherwise I don't see them any different from existing companies already operating in the country.
As a new company coming back to restart their operation, they should have entertained the public to build up the trust and it would also have helped them get the customer feedback. This way as a new entrant they would have developed a relationship with customers but it seems that Nishat-Hyundai like all the existing automobile players are coming to exploit the buyers and public of Pakistan in name of new company, better company or maybe calling themselves a premium brand. Their products might be better but this does not mean they start pricing it completely differently how their same models are priced in other markets.
There had been questions what Hyundai will offer to general public. The good news for now is Hyundai will probably offer a passenger car as Elantra, a small crossover in shape of Tucson, and an entry level small car maybe a i10 hatchback or an Accent sedan in future as local assembled vehicles. But for that we have to wait for another year or so.
Beside this Hyundai will offer a locally produced H1 PICKUP [Shezore ] in commercial categorically while an imported unit in shape of Grand Starex van [ read here > https://www.facebook.com/groups/PakWheelsOfficial/permalink/2161464767302168/ ]
We all welcome the new companies but not at cost of exploitation, cartelization and profit margins which make people suffer. If the Government of Pakistan is giving them subsidy, they should pass it on to consumers. I hope Hyundai, KIA act responsibly and develop a better relationship with their upcoming consumers. We hope Hyundai locally produced vehicle are reasonably priced with decent features and saefty equipment.
Lastly; If for some reason you find an unknown amount and transaction transferred in to your bank account and you become multi millionaire or even billionaire overnight automatically as happened with few in recent times, you can put your deposit in cash towards Santa FE.
Best of Luck “People of Pakistan”
Welcome & Mind your ways “Hyundai Pakistan” .
[ The above post is my personal opinion and does not necessarily binding on readers to agree to it. Everyone has their own opinion and we all must agree to disagree.
Fazal.Wahab@Pakwheels ]
