Demand for small cars is expected to rise as fuel prices reach new highs

Pakistan has lately suffered a Rs 60 per liter surge in petrol prices in less than 8 days, which has never happened before. Petrol currently costs a record Rs 210 a liter, with another hike of Rs 60 per liter expected in the near future, bringing the price of petrol to Rs 270 per liter.

Other fuel prices, such as high-speed diesel and light-speed oil, have also risen in tandem with the price of gasoline. The enormous increase in gasoline prices will have a negative impact on the economy, including high power, food, and commodities prices, which are already out of reach for the majority of people. It will also have an influence on new car purchasing habits.

Car prices are being rapidly changed due to fast weakening currency and rising shipping and raw material costs, with three significant price adjustments being reported within the first four months of the current calendar year. Due to the country's uncertain economic and political circumstances, many automakers, including Kia, Toyota, and Proton, have already halted taking reservations until further notice. Suzuki, on the other hand, appears to be mostly unfazed by the situation.

The firm primarily sells tiny cars, mostly hatchbacks, with three out of four models priced at $1,000 or less. It also sells Ravi and Bolan, the 40-year-old truck and minivan, which have no direct competitors in terms of pricing. Its most successful product is the Alto, which is not only the country's best-selling car but has also broken several records since its introduction in mid-2019.

The fuel efficiency of Alto is one of the key reasons for its tremendous success. It is Pakistan's only 660cc Kei automobile, and despite its hideous appearance, it has achieved a huge success thanks to its remarkable fuel efficiency. Another factor is price; since most ordinary sedans have surpassed the Rs 3.0 million mark, buyers of sedans are increasingly turning to hatchbacks, and among the available options, the Alto is the most suitable, as it is the least expensive of the lot and is relatively fuel-efficient– something that is considered an important factor in these difficult economic times.

Another benefit of compact automobiles is their size, which makes them easier to handle in crowded traffic and fit into narrow parking spaces, something that bigger car owners do not appreciate. Furthermore, newer designs allow for more internal space, so occupants are no longer as confined as they were in previous generations of hatchbacks. Another bonus is the inclusion of an automatic transmission.

Suzuki has been having supply-chain troubles with its other two hatchbacks, the 1,000cc WagonR and Cultus, but it has already begun shipping the vehicles. Pak Suzuki has sold 18,739 WagonRs, 19,431 Cultus, and 58,250 Altos in the first ten months of the current fiscal year, which is more than three times the WagonR sales and more than double the Cultus sales.

In Pakistan, no other carmaker has yet to create a decent little car that can compete with the Alto. Both Honda and Toyota have been hesitant to produce anything in the hatchback sector for years, despite having some fantastic 660cc Kei vehicles available in the Japanese domestic market. The lone exception is the Kia Picanto, which competes largely against the 1,000cc Suzuki Cultus (Celerio) but has a high fuel consumption. Price Pearl, a 30-year-old Mehran under the skin, poses little danger to the Alto due to its restricted countrywide availability and absence of automatic transmission, as well as its poor fuel economy due to its outmoded 800cc engine under the hood powered by an archaic 4-speed manual transmission.

The incredibly high cost of gasoline has made compact vehicles like the Alto, WagonR, and Cultus even more appealing to the populace, since sedans and crossover SUVs have become too impractical from a consumption standpoint, given that you won't even get 5 gallons of petrol for Rs 1,000 spent. Small hatchbacks are the only practical alternative now that CNG is no longer an option. We'll have to wait and see whether automakers alter their attention from producing super-expensive crossovers to offering fuel-efficient hatchbacks and Kei cars in Pakistan.

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