Following the earlier announcement by Indus Motor Company Limited of the discontinuation of Daihatsu Coure, Pak Suzuki Motor Company (PSMC) recently announced similar plans with respect to its 1000cc Alto model. Implementation of Euro-II compliant emission standards from July 2012 is to blame for this.
Although applicable on all vehicles assembled locally, PSMC has announced that it only plans to cease production of Alto while its other non-Euro-II compliant models (Mehran, Bolan and Ravi) will be upgraded to meet the new regulatory specifications. We believe the reason behind Alto being singled out is the fact that at least three of PSMC’s models (Mehran, Bolan and Ravi), together comprising more than 60 per cent of total units sold in CY10, use variants of the same engine thus making it economically feasible to import an upgraded version of the engine used in these models as compared to investing in one which makes up 15 per cent of total sales volume, said Umar Hafiz at AHL.
disaster for PSMC?
Not necessarily! Even though this would impact EPS negatively by approximately PKR 1.05 when viewed in isolation, we believe that PSMC’s Mehran model would witness an increased demand owing to this cessation, he added. ‘Our argument is based on the relative pricing of different passenger cars in the 800-1000cc segment. With Coure no longer being an option for customers, Cultus, priced at Rs957,500 (average) as of January 2012, is the next best alternative,’ he added. However, with this price being almost 25 per cent higher than Alto’s January 2012 average price, coupled with the effect of higher fuel costs owing to CNG curtailment and halt of production of CNG variant models, we believe that Mehran sales would also be augmented
Will Mehran save the day?
Although it is impossible to calculate with a high degree of certainty at this stage, but even if CY12 Alto sales (by volume) are reduced by 60 per cent, and half of these lost sales are captured by Mehran, this would entail a top-line net impact of Rs2.6 billion. Our base case hinges upon Rs1.8 billion revenue increase brought about by an additional 3000 Mehran units being sold at a CY12 estimated price of Rs597,000. However, being a high margin product with higher degree of localisation, Mehran sales would entail lower costs, especially when viewed in light of rupee depreciation against Japanese yen and US dollar.
CULTUS is better any day.
what impact old model alto car resale value high and low??????
low. Genuine parts will also be ceased to produce by end of year.
I like how the Euro-II emission standards are to "blame" for this. Who on earth would want to do their part to make the atmosphere cleaner? The choice of words here could have been more appropriate.
What will happen to my little coure? It will be heart broken when i tell you are no longer in demand 🙁
I agree with Hassaan, the article is making it sound like environmental laws as something bad. I also believe it's not written very well.
The world is already moving towards Euro V and Pakistan has yet to adopt Euro II.
The article was written from the point of view of investors (read capitalists). It is a research report I came across a few months back which has rightly pointed out the reason behind a potential loss of investors' wealth. Unfortunately Pakistan Today has copied the entire article word-for-word without keeping in mind the the different target audiences, which has (rightly) led to the rise of reservations such as yours. Such cost-inducing and/or revenue-decreasing initiatives are hardly among the priorities of the intended target audience. The original article can be viewed at http://www.arifhabibltd.com/downloads/morningcall…
Why don't Pak Suzuki Opt a latest version of Alto being used in Japan with highly fuel efficient engine or be named as Suzuki A-Star in India and introduce the same in Pakistani market with K-10 (1000cc) engine, as this will help to cater the market between Suzuki Mehran being a cart and Cultus being expensive…
Can any one tell me about the new model of Mehran with VTI Engine?… Waiting Please
while they are fooling people with mehran and the likes, what they really should do upgrade mehran/alto to latest model Suzuki has in Japan and other markets. Why an decades old car models are sold as latest in Pakistan? Pakistan govt should put some pressure on the companies to be at par in terms of techonolgy, newer engine and cars consume less fuel, safer and also enviroment friendly!
why the PMSC is making fool to people with mehran and the likes.If PMSC is sincere they really should do upgrade mehran and alto to latest models of Suzuki cars as in Japan and other markets with powerful EFI system which is more efficient and economical with respect rising prices of petrol and load shedding of CNG . Why an decades old car models are sold as latest in Pakistan? Pakistan Govt should facilitate the companies to use new technology as well as environment friendly. I also request the GOVT to start production of SANTRO EFI car as soon as possible because that was an economical car in this energy crises.
Reportnd also
I would like to prefer the 796cc EFI engine in Alto car as in Mehran for the fuel efficiency, more over the side mirrors and interior should also made comfortable and automatic.
Comments are closed.