Lucky Motors, Peugeot Pakistan, and Honda have unveiled innovative financing plans that signal a major shift in the automotive sector. These groundbreaking initiatives bring zero-interest financing options to the forefront for popular car models like the KIA Sorento, Peugeot 2008 Allure and Active, Honda BR-V, and Honda HR-V, providing a golden opportunity for auto enthusiasts.
While direct customer financing is a well-established practice in the two-wheeler market, Lucky Motors and Honda are trailblazing this concept in the four-wheeler segment. Inspired by the successful strategies of the two-wheeler industry, their goal is to enhance accessibility and affordability for car owner
Muhammad Faisal, President of Automotive at Lucky Motors, underscores their customer-centric approach. The industry is grappling with affordability challenges, and this inventive strategy aims to offer cost-effectiveness while reducing financial burdens. Amir Nazir, General Manager of Sales and Marketing at Honda, echoes this sentiment, emphasizing the twin objectives of expanding market presence and delivering tangible benefits to customers.
Escalating automotive prices, coupled with stringent lending regulations imposed by the State Bank of Pakistan, have created a daunting environment for both consumers and manufacturers. Depressed sales have become a recurring theme in the media. Lucky and Honda have responded to this turmoil with unprecedented financing plans, challenging traditional norms.
In contrast to the two-wheeler industry, known for high markups, Lucky and Honda’s zero-interest plans distinguish themselves in the market. With repayment schemes spanning from 12 to 24 months, these plans offer a unique opportunity for customers to cut financing costs, offering much-needed relief in the prevailing economic climate.
The choice of specific models, such as the Sorento and 2008 Allure, reflects strategic decision-making. Faisal explains that the higher price point of the Sorento and increased withholding tax made it a prime candidate for financial assistance. Similarly, Nazir notes that backorders for these models were relatively low.
Customers can stand to gain significantly from these financing options, with potential savings ranging from Rs 0.79 million to Rs 1.79 million, depending on the model. The Peugeot 2008 Allure and Sorento 3.5 FWD offer distinct opportunities for savings. This move not only attracts customers but also allows manufacturers to clear surplus inventory.
As this financing model enters its pilot phase, questions emerge regarding its long-term sustainability. While interest rates may not experience significant changes in the short term, the long-term strategy remains uncertain. Lucky and Honda’s experiment has the potential to reshape the industry if they choose to leverage the insights gathered during this phase.