Pak-Suzuki discontinues booking of CNG fitted vehicles – Alfalah Securities Limited

Karachi: Pak-Suzuki Motor Company (PSMC) has discontinued the booking of CNG variants of Suzuki Mehran, Alto and Bolan from February 11, 2012 and has asked their dealers if any orders are in the queue by February 15, 2012.

According to Alfalah Securities Limited, the decision to discontinue production and booking orders of CNG fitted vehicles has been taken by the company on account of the government’s ban over imports of CNG kits and cylinders. PSMC, whose 80% of the production accounted from these CNG fitted vehicles, were till now using CNG kits and cylinders previously imported before the imposed ban. It is anticipated that PSMC, having a 50% market share in the industry, after the discontinuation of booking CNG fitted vehicles would witness a significant drop in offtakes despite the prices of these cars would be brought downward by PKR 40,000-50,000. Consumers who relied on the quality of factory fitted CNG kits would now have to search for kits of the same quality, already facing acute shortage. The prices of CNG kits have also surged to ~PkR 38,000 from the range of PKR 24,000-27,000 prior to the government’s ban, where its dealers have started to black marketing the product. Meanwhile, PSMC’s vehicle production during the 7MFY12 period has mounted to 56,744 units as compared to 47,153 units in the corresponding period (up by 20.3%YoY), Alfalah Securities Limited believes the government’s ban on importing CNG kits and cylinders would severely affect the production and offtakes of these cars.