Car display centers in Pakistan are also referred to as cars showrooms quite often. These include both new car dealers and used car dealers. A new car dealer would usually be associated with some brands of cars or having exclusivity with a certain brand. Audi Center Lahore, Toyota Walton Motors, Honda Fort, Suzuki Mehran Motors and Dewan Motors Private Limited (BMW) are just some examples.
Pakistani automobile sector is saturated at the moment with a limited number of key shareholders. These include Suzuki Pakistan with 33% market share. Second-ranking is for Toyota (Indus Motor Company) with 28% share while Honda (Honda Atlas Cars Pakistan Limited) stands at 3rd position with 25% share. Other 14% share is shared among luxury brands like Porsche, Audi, BMW, Mercedes, Range Rover, Maserati and some of the Ferraris. Among luxury cars, Audi and Porsche have gained significant market share during a decade and have registered good growth. Almost every brand has car showrooms in major cities nationwide.
In Pakistan, automobile sector is a Government regulated sector and is directly influenced by the directives and policies of Government. Sales taxes, import duties and maximum age cap for imported cars are just some of the factors directly influencing the automobile sector.All the automobile manufacturers have a market presence through new car dealers. Every automobile manufacturer has authorized dealers in major cities of Pakistan. These dealerships are usually separately incorporated companies engaged in normal buying and selling of cars. Most of them also provide after sale services. The dealership in spare parts is also a common trade.
Among the automobile companies, Suzuki, Honda, and Toyota have manufacturing plants in Pakistan. While luxury brands like Audi, Porsche, BMW and Mercedes have new car dealers directly involved in imports under exclusivity arrangements. Some more luxurious brands like Ferrari, Lamborghini, Maserati and Ford are imported under a one-off arrangement through commercial importers. During recent years, luxury car brands have gained significant road presence.
Although it takes a significant amount of time to take delivery of a new vehicle, most of the car display centers have ready to deliver stock of selected models of cars. Dealers also charge their customers for the delivery charges, which adds to their income stream. Moreover, spare parts segment is also a lucrative business segment.An analysis of financial statements of new car dealerships reflects that on average a car dealership has 15% gross profit margin and net profit margin varies between 8-10%.
With the prospects of Audi and Volkswagen planning to set up manufacturing facilities in Pakistan, there is a good opportunity for new car display centers to emerge. Following the footsteps of Audi Center Lahore and Honda Fort, new car dealers can set up new car showrooms for these brands. So if you are thinking of being a new car dealer, odds are not against you.