Expect the Rolls Royce 1965 at the Car Rally

One of the better things coming out of the Lahore Chambers of Commerce is the decision to organize the Lahore Shopping Festival.

It has a lot of things covered it seems. And there is something for car lovers as well.

The Lahore Shopping Festival will start from the 4rd of April 2011, and will go on for about one week, ending on the 10th of April 2011.

Here’s what you can expect:

• A Polo Tournament at the 125-year-old Lahore Polo Club
• A Qirat competition on April 5th. The winner of the competition will be awarded PKR 100,000 and an Umra ticket (cool, no?)
• A Classic Car Rally on April 6th, starting from Siddique Trade Center to Liberty Chowk. Around 50 cars dating from 1920 to 1965 will take part.
• Young Entrepreneurs’ Business Plan competition will be held at 90 The Mall on the same day i.e. April 6th. (Wonder what the first prize for this competition would be!?!)
• A Musical Evening at Raiwand Road
• A Peace Walk on April 7th, from Lahore Chambers of Commerce to Alhamra Hall (Mall Road), at 10:30 AM.
• A Photography Competition would be held at the Tollinton Market Hall.
• Lahore Wrestling Competition will be held at the Punjab Wrestling Stadium on April 8th.
• On the same day (April 8th), a two-day Punjab Expo would start at the remarkably built Lahore Expo Center, where trader and manufacturers would showcase their products at discounted rates.
• Also on the same day (April 8th), a rally of heavy bikes would be organized, from Lahore Chambers of Commerce and Industry offices to the Lahore Expo Center.
• A Fashion Show will be help on April 8th at 8:00 PM at The Royal Palm.
• A Conference on Investment Opportunities will be held at the Lahore Expo Auditorium on April 9th.  A must-attend for would-be entrepreneurs and businessmen.
• A Cycle Race from the LCCI offices to the Lahore Expo Center would be help on April 10th.

OK, so I don’t know about you, but a lot of things are happening here; Cars, bikes, cycles, business opportunities and even wrestling and fashion shows! Don’t know about you, but it sure presents ample opportunity for many of us to be entertained, get educated and stay interested!

The Pakistan Automobile Manufacturers Association  (PAMA) has a spokesman, surprise surprise, who says that the import of 5 year old cars would make Pakistan…wait for it...a dumping ground for the global market. They would throw away their 5 year old Accords, Mercedes and Audis into Pakistan, what a shame!

In a recent article I read somewhere in the back pages of The News (Lahore section), the association has expressed dismay that the facility for allow 5 year old cars would retard the gradual growth the Pakistani auto sector has witnessed. Yes, the growth was because the import of cars was not allowed. That, my friends, is called a monopoly. Also note, that to revive economies, governments do sometimes ban imports, as they should. My only problem is that given the chance, this PAMA did not capitalize on the opportunity to give us, the consumers, better cars. They simply started increasing prices, along with ‘owns’, till their pockets exploded. They had a long-enough chance to correct this, but greed is greed is greed.

For example, in 2007, you could get a 2002 Honda Accord for less than the price of a new Honda City. Yes, a face-turning luxury sedan, all 1.8 liters of it, for less than the price of a brand new 1.3 liter engine car. The Accord was 5 years old, but you couldn’t tell it from the drive, or the look. The concept of 5 year old cars being ‘clunkers’ don’t apply if you are careful in your car selection. The cars they make now can easily face 5 years of normal ware and tare.

By the way, the only imported car that has done truly well in Pakistan is the Toyota Vitz. You know why? Because Indus Motors (God bless their souls) made car parts of the Vitz available in market. That is what needs to be done for other ‘economy’ cars, as well as a select luxury sedans, and this should give enough competition to our auto industry to get their act together.

Now in the upcoming budget, there are considerations to extend this ’3 year limit’ to 5 years. Now you can import 5 year old cars into Pakistan, so says the budget proposition. And guess who opposes this decisions? The automobile industry of Pakistan, of course.

According to a press release, the car industry folks believe that the importers will, and I quote,

‘dump junk automobiles in the market, creating unhealthy and unfair competition for the local manufacturers

Well sire, if that is the case, let the dumping of 2003 Honda Accords and 2006 model Toyota Vitz begin! It would take some serious battering to make a five year old car ‘junk’. Like I said, the cars made in 2006 for example, would still beat the Pakistani manufactured car built in 2010 ANY DAY! This should be taken as a wake up call by the Pakistani businessmen to get their act together and start producing cars worth paying money for. They – the automobile industry – sell us cars that are high on price and low on quality, and they do it because they have the one thing any business would want – a monopoly. Why would I buy a Toyota Corolla for 1.8 Million rupees when I can import a 2002 Honda Accord CF3 for 1.3 Million? Is it really worth your money to buy a Suzuki Cultus than to buy a Toyota Vitz?

This bill, if passed, would be a win for the consumer. They would have more cars to choose from, hence forcing the automobile industry to lower their prices (you wish!!).

I wonder what someone from Honda would say to this? If the price of production of these cars is so high, then why aren’t we told about this? If the car companies here want to make exuberant profits, then why wouldn’t the consumer look elsewhere?

Stay tuned for more on this…God willing.

First, there was the Suzuki Swift (covered on CarAdvice here and for Swift pictures, see here). Then there is Toyota coming out with four different cars, all belonging to the, ahem ill-defined ‘spacious’ variety:

• Toyota Prado (CarAdvice’s review of one cool feature in Prado can be found here)
• Toyota Avanza
• Toyota Fortuner (that I can’t help spell and call Fortrunner)
• Terios  (by Dihatsu)

Toyota Avanza is priced at PKR 1,799,000 for the Standard version and PKR 1,999,000 for the ‘Up Spec’. And the difference of PKR 200,000 is because in the Up-Spec version, you have 4 speakers instead of 2, 15-inch alloys instead of 14-inch steel and ‘electronic’ rear view mirror control instead of ‘manual’.

The car is 1.5 liters which I feel will be underpowered if you stack the car up to full capacity and drive back home from a good lunch. Toyota is intelligent enough to introduce different cars into the market and play up to the wallet of all classes of our society. I keep hearing stupid remarks by people that ‘the cars are too expensive’ for Toyota to bring in. No man, the car is expensive for me to buy it! But there are definitely people out there who’d consider Toyota Avanza as a right fit for their combined family trip. Tthe reason Yamaha doesn’t bring in heavy bikes, or Suzuki doesn’t bring their highly successful GS series of motorbikes (from 150 CC to 750CC) to Pakistan is ‘officially’ quoted as ‘lack of a market’. Well, there will be no market unless some makes it, and Toyota makes it every time!

Toyota Avanza Pictures

This is what it is all about, check ‘em out.

Although Bugatti Veyron made by is the fastest production car currently with a price tag of US$.1.7million and a top speed of 253mph achieved by its 1001hp Narrow Angle W16 Engine and ended McLaren F1′s (Top Speed: 240mph) 11-year reign as the fastest production car in 2005. Today several cars are in various stages of development that have proven faster in trials.

One such car is the swedish-made Koenigsegg CCX whose manufacturer also claims that it is capable of exceeding 250mph putting it at par with the Veyron. Infact CCX ended the reign of McLaren F1 but its own reign was short-lived as Bugatti immediately updated its Veyron. Koenigsegg has announced that they will update CCX very soon.

Yet another challenger is SSC Ultimate Aero which on Sep. 13th, 2007 using a closed section of Washington State Highway clocked a top speed of 256.18mph using a V8 engine half-the-size of Veyron’s. It generates 1183bhp &  of torque (Veyron: 479lbs). The car’s website page(www.sportscarcup.com/ssc-ultimate-aero/) lists the top speed as 273mph. Price: US$0.6Million.

Another equivalent of this amazing challenger is the fast yet modified supercar built by Barabus called Barabus TKR having 6L V8 Chevy bi-turbo engine capable of generating an amazing 1095bhp & acgheivingtop speed of  270mph. The body & chasis of the car are both made of carbon-fibre. It is rumoured to reach 0-60mph in 1.67sec which is amazing since even 4 sec qualifies for supercar.

An obscure modifier using modified versions of Dodge Viper under name of Hennessey SRT-10 Viper Venom 1000 Twin Turbo Coupe claims to challenge Bugatti Veyron (even SSC Ultimate Aero) using a 500bhp Viper engine reworked to give 1000bhp at 15psi instead of the usual 10psi creating a 255mph marvel priced at a ‘reasonable’ US$0.225million.

Colani Racing of Switzerland has designed a roadster which is yet to see the light of any road other than the 24-hour LeMans Circuit. With a 900hp engine The Colani LeMans is rumoured to have a top speed of approx. 255mph. However there is no news regarding any plans for commercial production and Colani are uptil now only producers of cars for racing purpose.

 Callaway Corvette Sledgehammer reached a top speed of 254.76mph on  Oct 19, 1989 driven by John Lingenfelter. Only 1 of these cars exists, although, at the time Callway Motor Company claimed that they could reproduce it for 0.400million. It seems no one wants one at that price & it has ended up being a concept car rather than a commercial production model.

Other concept cars that failed to become production cars included Oldsmobile Aerotech Short Tail (Top Speed: 257mph); Lotec C1000 (Top Speed 268mph); F-Bomb 1973 Camaro (Top Speed 270mph); Bristol Fighter SCR (270mph – electronically limited to 225mph); Audi R-Zero (Top Speed 253mph); Melling Hellcat (Top Speed 276mph) & the 2000hp Walley Larson LE1 Groundfighter (Top Speed 305mph).

Anything I missed please do let me know.

This compares favourably as a matter of fact on par with the petrol-driven 6.3-liter (6208cc) V8 powered (571 hp and 650 Nm) SLS that accomplishes the same task in 3.8 seconds. The stats maybe okay for the petrol version but the electric version is as good as its gets (for now anyway).

In a statement, Mercedes-AMG GmbH’s CEO Volker Mornhinweg said, “With the SLS AMG with electric drive, we wanted to redefine the super sports car. For us, it is not just about responsibility. We attach just as much importance to excitement and classic AMG performance.”

I surely believe thay have. Its expected that the car may well be in production by 2011. When it does start commercial  production it will offer fierce competition to Tesla Roadster eV & Lightning GT Electric Sportscar (both already in production phase).

PS: Photos may not  depict the final production version as it has been shielded by the manufacturer & pix are only ‘spy photos’ of the prototype.

Complete or ‘full’ insurance as it is sometimes called covers all expenses of repair using original parts for any number of accidents but offcourse there is a catch. The amount for which the vehicle is ‘covered’ reduces due to ‘depreciation’ of car’s value.

Who determines the depreciated value you ask? The insurance companies have a ‘fixed’ 10% annual depreciation as a ‘standard. Meaning your car is assumed to be worth only 70% of its listed price by the time 4th year of lease starts.(Doesn’t matter how well it is maintained it is just all mathematical (not good  commonsense but great ‘business’ sense for the insurer).

I recently had to ‘pay’ 30% value for parts repalced after an accident but still thought it was a good deal so GET IT INSURED.

PS: Some people have even started ‘conning’ the insurers by ‘staging’ fake accidents to claim more than actual but that should be the subject of another post which I’ll write some other time.

Although it may not be virtually unknown outside its ‘native’ Japan it won the 2007 Car of the Year award from the Japanese Automotive Researchers and Journalists Conference (RJC), and two other “Car of the Year” awards, from the Carview Corporation website and the Consumer’s Choice.

It also won the “Most Advanced Technology” Special Achievement Award at the 2006–07 Japan Car of the Year awards, where it was nominated unsuccessfully in the overall Car of the Year category, and ranked first in the Japan Mini-Car APEAL Study published by J.D. Power Asia Pacific in October 2006, with a higher score than any previous winner. Aside from the 2006 Good Design Grand Prix, its style won Design Awards from the Japan Automotive Hall of Fame (JAHFA), and the magazines Popeye and Car Styling.

Even the 2008 Car of the year 2008 Toyota’s iQ although better performance wise & designed by Toyota’s design studio in France pales in comparison to the sleek shape & georgeous look of the “i”. Agreed that microcars or ‘kei’ cars as they are known in Japan are made generally for the ladies &/or ‘sissies’ but offlate the modified versions of Smart Cars having superbike engines have been known to pack quite a muscle (0-100kph in under 3.5seconds.

“i”s breakthrough success with the said market came after a “Hello Kitty” customized “i” was put on display in a large Japanese Department Store for a week in 2007. Other close rivals include Smart Mortor’s fortow & K models, ZAP (zero air pollution), Toyota iQ the proposed Aston Martin-Toyota joint venture Cygnet & Honda’s Insight.

Suzuki has also marketed its own budget version of the smart car known as Suzuki Twin while rounding off the European competition are Mercedes-Benz’s Motsy & Subaru’s R2.

Usually the banks offer tenures of 1-5years with the 3-5 years being the most popular selection made by the clients. SBP has however allowed consumer lending for automobiles upto 7 years so you can always ask your banker for an extended period which will then be considered as a deferal from norm but still within the approval authority of the bank. My personal advice is that you take either a 3-year plan or a 4-year plan, reason being that the installments for 1 & 2 year plans will be too burdening on your income (especially if you are salaried individual with fixed income) while in case of 5 to 7 year plans you end up paying more than 1.5times the actual price of the car. Let me explain it through some simple calculations:

Assume that the car of your dreams costs Rs. 1million. You pay a quarter of it as downpayment while the interest rate is taken as 15% which is possibly the best one you can get at the moment then your installment per month would be as follows:

Tenure (Years)            Installment Amt.                 Amount paid during tenure

1                                         Rs.71,875/-                                     Rs.1,112,500/-

2                                         Rs.40,625/-                                    Rs.1,225,000/-

3                                         Rs.30,208/-                                    Rs.1,337,500/-

4                                         Rs.25,000/-                                    Rs.1,450,000/-

5                                        Rs.21,875/-                                      Rs.1,562,500/-

So a Rs.1million car ends up costing Rs,1.5million in a 4-5 year plan even without considering insurance which usually is around Rs.4,000/- p.m for a car in that price category. Thus you must choose tenure wisely after making calculations as above. Your banker will be more than happy to furnish you with complete repayment schedules for all tenures if asked.

Same is the case with downpayment otherwise known as equity contribution by customer. SBP allows from zero upto 50% downpayment however the baks generally allow plans for 10%, upto 30%.  Again this means that you must negotiate strongly with your bank as it will affect the end outcome. Any amount you contribute towards the purchase of the car will reduce the amount provided by the bank thereby allowing total amount of markup to be reduced when downpayment increases. (The more you pay less will be the amount on which you have to pay interest).

Ending as always my suggestion is that you haggle with your bank just like you bargain with your corner-grocery storeman. The more you haggle the better option you will get. Next post will address matters pertaining to insurance.

Now what the hell is KIBOR you may ask. For the uninitiated (which means the most of us – non-bankers) KIBOR is an acronym standing for Karachi Inter-Bank Offer Rate. KIBOR isn’t a new phenomenon either. It has been around for atleast a dozen years but its impact on the consumer finance sector is a relatiely new phenomenon.

Bankers have lent to ‘each other’ (read: inter-bank i.e. bank-to-bank) by using KIBOR since the early 1990s when this emerged as a substitute for the LIBOR (London Inter-Bank Offer Rate) which though more stable was definitely not in sync with our ‘local’ money market therefore the local banks all got together and came up with KIBOR.

Banks initially lent using KIBOR rate to their Corporate Customers for what became known as Money Market loans (meaning: loans against borrowing from other banks). This was extended to the Commercial/SME segment during the early years of the 21st century. Once the KIBOR became high due to the geo-politcal economic reasons the banks were left with no choice but to abandon fixed-pricing altogether in faour of KIBOR-linkage (meaning: KIBOR-plus-bank’s profit spread).

Further variants of KIBOR that evolved later were attributed to its tenor (which should either match the tenor of the short loans or should be atleast half-year i.e. 6-months or 1-year i.e. 12-months).

People worried by high markup rates can finally heave a sigh-of-relief as the ‘dreaded’ KIBOR has somewhat nosedived from its New Year 2009 peak of around 16% to somewhere around 11% as of 31-July-2009. (%age rate pertains to the most widely used 6-months KIBOR ask rate).

People requiring further clarifications regarding KIBOR in particular &  other advice regarding Car Leasing in general are invited to leave a message alongside this post for a ‘prompt’ reply. Next post in this series will cover flexible tenures & downpayment options.