by Tariq Ahmed Saeedi
Facing competition from three marketplace giants — OLX Group, EMPG and FCG — PakWheels is ramping up its online transaction services in Pakistan.
The auto site recently started offering white glove sales and a car inspection service.
“Our Sell It For Me (SIFM) service is already a game changer where the customer does not have to leave the house and interact with anyone except with PakWheels.com car sales agent,” said Raza Saeed, founder and CEO of
PakWheels, in an interview with the AIM Group.
“Because of our model we have seen faster recovery compared to other retail models that are being launched elsewhere and also in Pakistan,” Saeed added.
A key competitor — the OLX and FCG-funded automotive site CarFirst.com — entered the used-cars ecommerce fray four years ago. The service lets auto traders and dealers access CarFirst’s inspected inventory and benefit from lead generation from the auto vertical’s call center.
Covid-19 and a flailing market
Pakistan’s used-car market hit rock bottom in the aftermath of the March lockdowns. In the following months, the pandemic also brought new car sales to a screeching halt. New car sales tumbled 53% year-on-year to 235,229 units in the fiscal year ended June 30, 2020, according to Pakistan Automotive Manufacturers Association (PAMA).
“Demand slowed to trickle thanks to Covid-19,” said Asad Ali, an auto analyst at BMA Capital. “Before that, the industry was beginning to rebound following an introduction of macroeconomic stabilization program by the government.”
Annually, OEMs assemble 250,000 cars and around 50,000 vehicles are imported. Given that the annual market in Pakistan is around 1 million units, that’s a gap of between 650,000 to 700,000 vehicles. Ali says that gap led to signicant price increases from OEMs. On top of that, consumer spending dropped substantially.
For used-car dealers like PakWheels, however, the decline in new car sales presented a remarkable opportunity to seize the market.
Moving toward normalcy
After the government eased lockdown on June 15, the market began returning to normal. For automotive sites like PakWheels, that means a corresponding growth in business.
“We have seen pre-Covid levels of activity from our consumer business,” said Saeed, the PakWheels CEO. “There has been a rapid shift towards online services and over time a lot more people will be willing to transact big ticket items like vehicles online.”
Saeed says his site has, on occasion, even surpassed pre-Covid levels. Car sales revved up. New car sales stood at 43,865 in July-October, up 8% year-on-year, according to PAMA.
Production of locally assembled cars and light commercial vehicles are
expected to surpass 400,000 units this year, according to an industry’s estimate.
“We are continuously improving our product offerings,” said Saeed. “We are focused on achieving our mission of transforming automobile buying, selling and maintenance in Pakistan. At this point we feel we are early on in the journey and want to focus on growth independently.” – AIMGroup