The sales of local and imported used cars have fallen by 60% due to a number of reasons including the devaluation of the rupee, rise in the price of petroleum products and a strict import policy.
Around 250 showrooms have closed down in Lahore alone and according to market insiders if this continues, within a few months another 400 will follow the same route. At the start of this year, there were 1,200 showrooms in Lahore.
The car dealers have started going towards other business ventures because they have lost billions due to the fall in car sales and this has also impacted the spare parts and auto repair businesses.
Research shows that Karachi is number one and Lahore comes second in used car sales. The city has over 1,200 such showrooms where they are sold and purchased, primarily centered around Jail Road, Maulana Shaukat Ali Road, Samanabad and Defence.
The used car market had been on the wane for a while but the trend took a turn for the worse after the federal government changed the used car import policy. Other intricacies were told as the reason for the decline in car imports by 80% coupled with the devaluation of the rupee making car imports less profitable.
The refurbished Japanese cars made up a large portion of the imports due to their reliability and comfort plus they were thought to be better than locally manufactured versions. Now, these cars, even the lower end 660cc ones, have seen their price tag go above PKR 1 million, pricing out most people.
A car dealer on Jail Road, Sheikh Yasir Yousuf while speaking to the media said that until a few months ago, a showroom was selling 7-10 used cars per month but due to inflation and other reasons, it has fallen to 1-2 cars a month.
Imported Japanese cars in the 1,000cc range have seen their prices go from PKR 1.3 million – 1.4 million range to PKR 1.8 – 2 million, while the 660cc cars have gone from PKR 0.9-1.2 million to PKR 1.2-1.7 million.
Same is the case for the locally manufactured used cars. The used 1000cc category has seen the price tag go up by PKR 150,000-100,000. Currently, the 1300cc category has seen a rise of PKR 200,000, the 1600cc cars have increased by PKR 250,000 and the 1800cc by almost PKR 400,000
Majority of the showrooms are based out of rented spaces and pay monthly rent of up to PKR 200,000-300,000 and even the lean staffed business has at least three full-time staffers but due to the dire situation, some owners have had to let them go to stay afloat.
Via Tribune