Consumer Purchase Patterns and Buying Decisions In The Auto Industry of Pakistan [Infographic]

In an economy like Pakistan, automakers have to make tough decisions on a daily basis regarding the prices of the vehicles. Despite their best efforts, they are criticized by the most important stakeholders of the industry i.e. the consumers.

The prices set by the automakers have a huge impact on the purchase decisions of the consumers. Automobiles are considered high involvement products which means they require a considerable amount of thinking and investment from consumers when they are in the market to buy one.

To find out the impact of car prices in Pakistan on the buying decision of consumers, PakWheels.com conducted a survey of close to 10,000 people from around the country. The participants involved in the survey consisted of people from all walks of life and majority of them were between the ages of 18 and 50 years.

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According to the results, of all the people who buy cars, 55% buy second hand or used cars. The number is huge and it reflects that brand new cars are out of the reach of most people in the country with only 32% of the people using new cars. If we compare this number with the average of Asia Pacific region then we are far behind. A recent study of Nielsen – a globally recognized provider of information and insights – revealed that 65% people in Asia Pacific region prefers new cars and 7% people prefer used cars.

Although, people cannot afford new cars in the country, yet they prefer to buy their cars on a cash basis rather than through a car financing facility or an auto loan. The results revealed that 65% of the people buy their cars on cash compared to 24% of the people who go for car financing or auto loan. The reasons behind that are the high markup on loans and lengthy procedures and exhaustive paperwork and documentation.

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The survey further revealed that 30% of the people buy cars that cost between one million and two million rupees. The most lucrative price segment remains the sub-one million rupees segment with 50% of the people spending less than one million rupees on buying a car. This is also evident from the abundance of small hatchback vehicles on the roads. These vehicles are not only cheaper to buy but also are easier to maintain.

Prices of new cars are constantly going up and this is an alarming situation for you if you are an automaker as 80% of the people prefer to buy cars that cost under two million rupees. This is also a reason why people prefer used cars over new ones as the midsize family sedans such as the Civic and Corolla Altis cost well above two million rupees when we account for the taxes and registration charges on these.

Our auto industry needs serious reforms or else the situation would go out of hands beyond all reconciliations.

Note: PakWheels conducted the study and prepared the infographic used in this post

Talal is a Director and the Editor in Chief at ProPakistani.


  • Muhammad Ashraf

    yaar this site is not auto magazine.

    • Muhammad Aamir

      Pakwheel has a website that’s why it is an IT related news :D

      • Fakhre Alam

        haha

      • g

        That is a low barrier to consider IT related news! AND if you REALLY want to apply that measure – start putting up posts from MAC and L’Oreal and fashion designers as well! Better yet: DEFINE your own category!

  • Nadeem Abbasi

    Nice article. thumps up ProPakistani team. There should be also section of automobile in site as well. In this way, all the valuable information will available at propakistani.pk

    I am really happy to find that you are growing.
    GOOD LUCK!!!!!!

  • Ali

    Good work