Elections are around the corner, and the political landscape in Pakistan appears less adorned with the usual spectacle of politicians flaunting sports utility vehicles (SUVs) and double-cabin pickups. A stark contrast to the enthusiasm observed during the 2018 elections, the lack of enthusiasm among political figures can be attributed to both a lack of spirit and the high costs associated with these vehicles.
Decrease in Vehicle Sales
Amidst the broader context of declining automotive sales, the SUV segment is notably grappling with lackluster demand. The prolonged restrictions on opening letters of credit (LCs) imposed by the State Bank of Pakistan have resulted in temporary plant shutdowns, worsening the challenges faced by local vehicle manufacturers.
High Prices of SUVs
The soaring prices of locally assembled vehicles have further exhausted the automotive market, discouraging potential buyers who are now grappling with increased living costs. The impact is particularly pronounced among the wealthy class, whose purchasing decisions are intricately linked with business dynamics and overall sales.
Election Rallies and SUVs
Traditionally, political leaders gearing up for elections would lead rallies on SUVs and double-cabin pickups to garner public support. However, dealers are currently facing a surprising downturn in demand for these vehicles, with Toyota’s Fortuner and Revo double-cabin experiencing a significant drop in sales.
The data paints a revealing picture: the combined sales of Fortuner and Hilux vehicles, as reported by the Pakistan Automotive Manufacturers Association (PAMA), witnessed a sharp decline from 5,298 units in the same period in 2022 to a mere 1,789 during July-November FY24.
Dealers are baffled by the limited sales ahead of elections and have expressed their eagerness while waiting for potential buyers. The extremely high prices of these vehicles compared to 2018 have made the purchasing trend tilt heavily towards cash transactions, with only 1% opting for bank financing.
The Hybrid Option
Amidst this market dynamic, the recently launched locally assembled Toyota Cross Hybrid Electric Vehicle (HEV) emerges as a potential contender. While it may not have the same election-driven allure as powerful petrol and diesel SUVs and pickups, the HEV offers fuel efficiency, appealing to a different set of buyers.
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