Euro-II standard: Suzuki Alto to be discontinued

The Pak Suzuki Motor Company (PSMC) has announced to discontinue its 1000cc Alto model due to implementation of Euro-II compliant emission standards from July 2012.

As major automobile companies of the Pakistan are adopting this standard, the Pak Suzuki has also decided to follow the trend.

Earlier, Indus Motor Company Limited (INDU) also announced to suspend the production of Daihatsu Coure due to the same reason. Interestingly, the Pak Suzuki has decided only to discontinue the Alto production, although the Euro-II is supposed to apply on all the variants.

Although applicable on all vehicles assembled locally, PSMC has announced that it only plans to stop production of Alto while its other non-Euro-II compliant models (Mehran, Bolan and Ravi) will be upgraded to meet the new regulatory specifications.

The only reason behind Alto discontinuation is that three of PSMC’s models (Mehran, Bolan and Ravi), together comprising more than 60 percent 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 percent of total sales volume, said by the Umar Hafiz-analyst at Arif Habib Limited.

He further stated that Mehran model would witness an increased demand owing to this termination of Alto production as it is the most economical vehicle of the company. The Cultus comes after the Alto in terms of pricing as it is priced at Rs 957,500, which is around 25 percent higher than price of Alto.

Moreover, the prevailing CNG shortages and halt of production of CNG variants models has also started a new challenge in the automobile sector. Hence, it is expected that sales of small cars like Mehran would get some pace as its fuel and maintenance cost is relatively cheaper.

With stagnant economy, declining purchasing power and increase in all fuel costs, the sector will face challenges.

Despite the relaxation in policy rate, the consumer financing has not picked up as this largely depends on improvement in employment statistics which then depend on healthy economic growth which is not in the near sight at the moment.

http://halaltamweel.com/2012/01/05/News/Euro-II-standard--Suzuki-Alto-to-be-discontinued/3079/Story.aspx