In a first, Honda, Kia and Peugeot launch interest free installment plans for vehicles in Pakistan
Lucky Motors, Peugeot Pakistan, and Honda have introduced innovative financing schemes that mark a significant transformation in the automotive sector.
These pioneering initiatives introduce zero-interest financing options for popular car models like the KIA Sorento, Peugeot 2008 Allure and Active, Honda BR-V, and Honda HR-V, offering a fantastic opportunity for car enthusiasts. While direct customer financing is a well-established practice in the two-wheeler market, Lucky Motors and Honda are pioneering this concept in the four-wheeler segment.
Taking inspiration from the successful strategies of the two-wheeler industry, their objective is to improve accessibility and affordability for car ownership. The rising costs of automobiles, combined with strict lending regulations from the State Bank of Pakistan, have created a challenging environment for both consumers and manufacturers, resulting in sluggish sales.
Lucky and Honda have responded to this situation with unprecedented financing plans, challenging conventional norms. In contrast to the two-wheeler industry, notorious for high markups, Lucky and Honda's zero-interest plans stand out in the market. With repayment options spanning from 12 to 24 months, these plans offer a unique opportunity for customers to reduce financing costs, providing much-needed relief in the current economic climate.
The choice of specific models like the Sorento and 2008 Allure is a strategic decision. The higher price point of the Sorento and increased withholding tax make them ideal candidates for financial assistance. This not only attracts customers but also helps manufacturers clear surplus inventory.
Customers can benefit significantly from these financing options, potentially saving between Rs 0.79 million to Rs 1.79 million, depending on the model. The Peugeot 2008 Allure and Sorento 3.5 FWD offer distinct savings opportunities. As this financing model enters its pilot phase, questions arise about its long-term sustainability.
While short-term interest rates may remain relatively stable, the long-term strategy remains uncertain. Lucky and Honda's experiment could reshape the industry if they choose to leverage the insights gathered during this phase.