Are Car Dealers Out the Door in Pakistan? Auto purchasing business
The Internet is slowly replacing all sorts of middlemen in the auto purchasing business with more people and businesses going online in selling or buying cars. Yet cars for sale are still mostly showcased in auto showrooms and car sales are still mostly conducted by car dealers.
In emerging markets, including Pakistan, where mobile and Internet penetration is growing but still considerably low compared to western markets, car dealers still play a significant role. Through partnerships with local auto dealers in the country, Carmudi conducted a survey in order to analyze what Pakistani motorists look for before purchasing a car and how car dealership visits are perceived by prospective buyers.
Pakistan has an average national income of $1,513. Paired with accelerating growth in the economy, demand for cars is on the rise. Carmudi’s survey found that 34% of Pakistanis have bought a car in the past 1 to 2 years, while 27.5% last bought a car in the past 3 to 5 years.
While 89% of survey respondents reported that that making dealer visits are important before purchasing, only 62.5% percent of Pakistanis stated that they prefer buying a car at a dealer rather than online. 42.5% of respondents reported that they made an average of three to five visits to an auto dealership before making a purchase. Interestingly, Carmudi found a mere 17.5% of the car buyers considered having a good relationship with a car dealer as an important factor in the car buying process. Pakistanis tend to focus more on friendly price tags and car brands as the top two factors that lead them to purchase a car, at 62.5% and 60% respectively.
The Carmudi study also found that 89% respondents agree that visiting auto dealerships is important before purchasing a car. 69% of Pakistani car buyers find visiting auto dealerships as a pleasant experience as they can compare different type of cars in one visit. Aside from the ability to test-drive vehicles at dealerships, 71% of Pakistanis also found car dealers to be informative sources as they can walk buyers through all the features that are offered in their car of interest.
Contrary to popular belief, 30% of Pakistani car buyers find prices of cars offered at dealerships to be competitive and not more expensive than buying from private sellers. Despite Pakistanis’ love of car dealers, there is still room to improve. 51% reported feeling confronted or pressured to buy a car when visiting dealers and 36% find purchasing cars at dealerships to be bureaucratic, and report feeling overwhelmed with the necessary paperwork.