KARACHI: Pak Suzuki Motor Company (PSMC) is launching Suzuki Swift, a 1300cc hatchback car in mid-January 2010.
“The launch will directly compete with major players in this category i.e. Honda City (Honda Atlas) and Toyota Corolla (Indus Motors)”, an auto expert said in his comments. The company believes that the new model will cater the local market needs with powerful engine capacity in the hatchback category.
The PSMC is ambitious on its future prospects as it is targeting to achieve 1 percent market share in overall car sales next year.
Besides this, the company also shared the expected sales numbers for the month of December 2009.
The analyst Furqan Punjani of Topline Securities said the model was a great success in India due to its cheaper price and better fuel efficiency and consumers in Pakistan largely prefer hatchback vehicles.
During last 3 years, average 52 percent of the total cars were sold in the hatchback category, which includes 800cc and 1000cc cars.
The PSMC is targeting the market between the 1000cc (with hatchback) and 1300cc (Sedan look) category, however, the competition will be stiff as this segment is already crammed by two major competitors, Toyota Corolla (with 69 percent of market) and Honda City (17 percent share) in the Sedan category.
He said with Liana loosing market share in the 1300cc segment, the new model would support overall market share of the company. However, much depends on the pricing of the new model.
Pricing will be the key: If the prices in the 1300cc segment are analysed, showroom price of Toyota Corolla (Xli) is Rs 1.26 million followed by City Rs 1.23 million and Liana Rs 1.1 million.
Moreover, if compared with one notch lower category segment (i.e. 1000cc), average price of Alto and Cultus is Rs 598,000 and Rs 765,000, respectively. Experts believe the price of Swift could be approx. Rs 900,000 to Rs 1 million.
December sales expected to be around 5000 units: The company believes that it could sale around 5000 units in the ongoing month which will translate into a decline of 7.5 percent MoM due to year end affect and a robust growth of 122 percent YoY primarily led by low base affect.
Thus, cumulative sales during 1HFY10 would be around 31,379 units, down 4.15 percent YoY. However, company expects significant turn around in the sales growth in 2HFY10 due to low base affect. Last fiscal (Jan-June 2009), Pak Suzuki sold on an average 2,426 cars per month which is significantly lower than existing monthly car sales.
The PSMC expects annual sales of the company to grow by 33 percent to 67,000 in FY10 as compared to 50,000 cars sold last year.