What Pakistan's Automobile Market Sorely Requires

ByShehryar Makhdoom | Published date:

Because of the incentives provided by the Automotive Development Policy (ADP) 2016-21 to new entrants, an unstoppable flood of SUVs has entered the Pakistani automotive market in recent years.

With the introduction of these SUVs, there have been many new competitors in the market, with this further driving up competition and the possibility of improved products in the future. However, prices have yet to fall for these new automakers.

This raises the question if new SUVs have come to the market in Pakistan as a godsend or a scourge. Let us go through some key points and see what the answers are to this query.

Are SUVs Really in Demand?

According to data, the popularity of compact crossover SUVs has surged by a factor of ten in the previous few years. According to a report by the Express Tribune, all of the new businesses are selling roughly 5000 SUVs every month in Pakistan, according to industry analysts and experts.

To put things in perspective, according to reports, Kia Lucky Motors (KLM) has sold 25,000 Sportage SUVs in Pakistan since its inception.

Hyundai Nishat Motors (HNM) allegedly sold over 2700 units in the first nine months of the current fiscal year and has sold over 2000 units thus far, which are outstanding sales results for a rather costly class of automobiles.

Crossover SUVs are becoming increasingly popular because they provide more practicality than hatchbacks or sedans while remaining price competitive in areas with rising GDP.

However, there appears to be an artificial demand for SUVs in Pakistan, as this market thrives on popularity rather than people's actual requirements, wants, or purchasing power. Although there are only a few people in Pakistan who can afford to own or even buy an SUV worth Rs. 4-6 million, it appears that there are a few too many smaller SUVs on the road.

Is there still a market for smaller vehicles?

Although these figures are undoubtedly recorded highs for the SUV market in Pakistan, it is worth mentioning that despite the restricted number of options, sedans and hatchbacks continue to outsell SUVs.