Why companies dont bring budget small cars

[sohikun]

So, a single 660cc car ( Alto ) led to that ? Hope that ans the question.

[saad0irfan]

No but it contributed. Because literally all of pak Suzuki cars are "budget cars" except swift.

[sohikun]

Blame this stupid mulk for the loss of "suzuki". Anyway, I think this thread has ran its course. The agruement will keep getting longer. We have different opinions. Simple !! I go my own way, sir, you go your own way.

[saad0irfan]

Agreed.

To each their own.
Although I would have liked it if you had explained your first sentence

[sohikun]

Although I would have liked it if you had explained your first sentence

Please check my previous posts about "pk". I might throw a temper tantrum again about pk or something, lol. Also, sir you guys are much more knowledgeable than me. I'm pretty sure, you have already understood what will i get at. I'm just a paindu, offering my 2 cents on the current situation.

[saad0irfan]

Bhaijan I'm most probably younger than so no need to call me "sir". It feels weird.

Also whatever I've learned about our auto industry, I've learned from this forum. My argument in the first post about why the new entrants can't and won't launch (and afraid of launching) budget cars comes from this forum as well.

And I'm not that knowledgeable lol I'm only sharing what I read here in an year. But still, thanks a lot!

[sohikun]

Ok bro

[muhammadhuzaifagamer]

bro, what can you predict about pak automobile industry in like 1.5 year, because, ughh i;ll just say, my dad is a gov employee and he'll get around 27 lakh, when suzuki alto was 14 lakh we were so happy that we were gonna buy our first car, but fk man, this mulk, its 31 lakh now, and i dont think its worth that money, same car in india is 4 lakh, then if currency conversion applies it became around 11 lakh, whyyyyyyyyyyyyy ussssssss, and there was united bravo, which is shit and got discontinewd, united alpha too, and prince pearl is also not that attractive in build and reviews and is of 20 lakh now, shit man, what are ur thoughts

[muhammadhuzaifagamer]

read my last comment please

[sohikun]

Asking me? I can't say sh*t, unfortunately n fortunately !! This mulk is unpredictable. Kabhi bhi kuch ho sakta ~ our policies are like a seesaw ~ halal n haram. But yea, things ain't getting better anytime soon. Even hyundai recently increased their prices, i read the pakwheels blog. Apparently " freight cost" has increased. The market is already dead and they expect users to purchase their cars after the "price" increase.

Here's the blog
https://www.pakwheels.com/blog/hyundai-car-prices-increased-in-pakistan/

[saad0irfan]

In my opinion, the only way to lower prices right now would be a mass boycott or competitors or local manufacturing.

No one's ready to boycott, most probably we won't get competitors, and local companies are too lazy and greedy to make anything here because it requires investment.

Rest @ifadey @fastian04 @darthvader @pwuser167550015690 @alitayyab can give better analysis. (Sorry if I missed someone I don't remember everyone's name tag)

[muhammadhuzaifagamer]

yeah boycoott, i saw a post which says there was increase i ncar sale from 5k to 10k in the month of may i guess but it was 2024, man why are they buying it, 10k car sold in a month, boycotttttt

[alam2632]

I get your point, but on the comparison with India - please don't do that, they are on another level, we couldn't fully manufactured a Suzuki Mehran locally, until it was discontinued, I think it was still around 90-95pc manufactured locally and some parts still imported.

We die for the imported stuff, we, as a nation, like to sit around and see things happening on their own. Don't like hardwork, spending days / nights on solving issues - how can you expect to compete or even compare yourself to other developing nations - automotive industry is in a similar state, they could fully manufacture the cars, but why would they do it when they are still making profits with this assembling approach, and no one asks / questions them.

[muhammadhuzaifagamer]

litrally i wanna cry, Maruti Alto K10 this car is of 4 lakh, 4 lakh * 3.32 = around 13 lakh,bht dil dukh rha,

[ifadey]

Saad is right. Small vehicles don't have good profit margins as compared to big vehicles. In order to be profitable with small vehicles, you need to sell them in huge quantities. Only Suzuki have the capability to do it.

It's kind of a chicken egg problem for new entrants. If they launch small vehicle in less price and suppose the initial number of orders came is less, then they will be at loss. But if they launch it at higher price, no one will buy it.

It's always safe for new entrants to launch high end vehicles initially and then come to small vehicles.

Only BYD have the capability to break Suzuki's monopoly. Just wait 2 years or so, once they start local assembling in 2026, they will launch small vehicles after the big ones. They have wide range of vehicles covering every segment. Their Alto's competitor Seagull can destroy Alto in every way.

[alitayyab]

The following IS ONLY limited to cost differentials between India and Pakistan, not anything else

One of the major reason they could do that is that they can recoup cost by selling many, many more units.

Other reasons include:
1. Taxes: About 33 to 40 of the cost of the car is local taxes

1. Localization

2. Input Cost: Cost of electricity, other consumables and utilities, and, freight of inputs etc

3. Labor: Cost of labor, one of the major reason that China was/is the go to destination (unitl India started taking some of the pie due to US sanctions)

4. Politico-Economic conditions: I dont need to elaborate on this i am sure

5. Govt. Policies. The govt. itself protects the local manufacturers by imposing high tariffs on imports. This makes the local manufacturers comfy. Why would they improve products when they dont have to. The reason Chinese manufacturers offer more is because why would anyone by similar products with a China tag. Case in point are Chery QQ, FAW V2 etc, which were feature poor and also didnt dent the sale of any of the local manufacturers. Notice how i dont include Koreans; they have way better reputation now. Not to take anything away from Chinese, but their reputation suffers when cars simply fall apart (Malaysia Chery Omoda, BYD QC issues etc).

I am also sure that P/E of Honda, Suzuki and Toyota in India is higher than in Pakistan

[darthvader]

Two reasons I think. Firstly Toyota and Honda don't have any car that competes against an Alto or a Cultus. JDM Kei cars don't count because they're not meant for international sales.

A bigger reason in my opinion is volume of sales. Pakistan's car sales volume is a rounding error compared to India or the USA. Ford sold 2.1 million cars in 2023 in the USA. On a very good month, Suzuki sells 4000 cars a month, 35-40,000 cars a year, and that's the biggest in Pakistan in terms of volume. Cheap cars have low margins, expensive cars have huge margins. Somewhere along the line these local companies must have figured out that selling 500 of a high margin car is more profitable than selling 1500 of a low margin car.

[pwuser167550015690]

And there's also brand prestige, which most manufacturers strive for.

Suzuki is indeed the highest in terms of sales volume but look at their brand value? Majority of our public don't hold it in high regard. Compare that to any other brand like Toyota, Honda, Kia, Hyundai or even some Chinese brands like Haval which are considered more premium.

Most manufacturers would rather be associated with luxury and have higher brand prestige compared to being associated with low costs, because it's just human psyche to be willing to pay a higher price for something you consider more luxury or premium.

[Xulfiqar]

Lol

Anyone considering haval or mg etc even remotely close to prestige is out of his/her mind

The reason is that sales are super darned low, Pakistani auto market is nothing more than a speck of dust and then furthermore Pakistan is close to 65 years behind in skill and tech. This is why there are zero made in Pakistan parts in global catalogs of Toyota, Honda and Suzuki.

To make a car profitable, the dies and assembly units need a massive level ROI, no co. Will make the mistake of creating a whole production process to sell leas than 10000 cars/year.

Having a warm body to place pieces on a puzzleboard is not considered skill, then local universities produce nothing that targets specific requirements of different manufacturing or production. Pumping out ratta paas degree holders nets you what you see today.

[sohikun]

Pumping out ratta paas degree holders nets you what you see today.

What?!? Ratta Pass?!? T.A !! Think again, it’s just producing tiktokers and dum***** these days. The current youth, bro, yaaR vApE dO naw. Cigars? Let’s do charaas. Unfortunately, some are suffering from identity crisis, they ain't sure if they are male or female. The so called "youth" dress up as clowns for tikktok ssss and think, "Omg, hum CoOl lag rhay haay."

Pakistan is close to 65 years behind in skill and tech.

65 years?!? Lmao! Pakistan is a million light years away from something actually decent. Jis mulk ke gatar ke dhakkan chori hote hain & THE OP !! Muft Kunda Service uska koi future nahi. Agayi tabdeli!! Khan aye ga, sab kuch theek hojye ga, jaddu ker degah. In comparison, Japan is a billion light years away from pakistan. Soo gud !!

@Xulfiqar p.s they are still teaching kids ‘keyboard kya hota hai’ and using the same old books, lmao. Nawaa pakistan !! 🇵🇰