Local auto industry is going through a tough period for the last couple of years, however the beginning of fiscal year 2019-20 remained even worst for the auto industry which faced a severe slowdown in sales. Sales were already on a decline due to constant depreciation of Rupee against the US Dollar, however the situation worsened when government introduced FED and other additional duties which resulted in an even greater increase in car prices.
Local automakers sold 43% less cars during the first 6 months of the current financial year compared from a year ago. Only 59,097 vehicles were sold during this period, compared to 104,038 vehicles sold last year. However if there was one car that enjoyed tremendous success even in these gloomy times was undoubtedly the Pak Suzuki Alto 660cc.
Having replaced the 30-year old Mehran in June 2019, the new entry level hatchback went on to become the bestselling car within a couple of months, despite a horrific market slowdown. In September 2019, the Alto 660cc managed to breach Pak Suzuki’s highest-ever monthly sales record with 4,924 units breaking the previously-held record of Suzuki Mehran which was 4,684 units.
Although Pak Suzuki increased the prices of Alto up to three times within just 6 months, its sales continued to escalate. The recipe to Alto’s success is simple. An entry level hatchback with an automatic transmission was a dire need of masses. The success of Alto can be analyzed by looking at its figures, which despite the industry slowdown has outnumbered every other car in the market. So much so that if we compare individual sales of Alto against an entire segment, the Alto still wins big.
|Suzuki Alto 660cc||All 1,000cc cars||All 1,300cc & above cars||All Pickups, 4x4s & SUVs|
23,658 units of Suzuki Alto were sold in the first 6 months of current fiscal year. However if we combine the sales of 1,000cc segment which comprise of Wagon R and Cultus, the cumulative sales is just 11,155 units in 6 months. Similarly 1,300cc & above options consist of Honda Civic, City, Suzuki Swift and Toyota Corolla in three different engine options. This segment saw collective sales of 19,797 units which is still 3,771 units less than that of Alto 660cc alone. Then all the pickups & SUVs which comprise of Suzuki Ravi, Honda BR-V, Toyota Hilux & Fortuner, JAC X200 as well as Isuzu D-Max saw 8,413 units sold in the discussed period which is less than half of Alto’s sales.
Alto’s success even in these bad times shows us that there are serious flaws in the market study and analysis by other players as well as newcomers. Instead of competing in the market by offering right products that people really want to buy, automakers have largely remained focused in launching expensive products that are beyond the reach of the masses.
Even established players like Toyota and Honda never considered launching small hatchbacks despite being in the market for over 2 decades. Both Honda and Toyota have some really successful products offered in other regional markets but in more than 25 years they never introduced a small car in Pakistan. Though 800cc Daihatsu Cuore was offered by Indus Motors during the previous decade, there was no replacement introduced ever since it was discontinued some 8 years ago.
Market require more competitive options in the small car segment which is the only segment that seems to be doing well in these tough times. Perhaps it’s about time automakers should revise their strategies and consider launching cars that fit within people’s budget in ongoing economic slowdown instead of introducing cars that grace the showroom floors only.