FATIMA S. ATTARWALA: What is the history of Dewan Motors in Pakistan?

ZAEEM UL HAQUE: Dewan Motors recently celebrated 21 years in October. Our partnership with BMW spans more than two decades. The decision to bring BMW to Pakistan was rooted in our commitment to offering a premium automotive experience and introducing the brand’s globally renowned luxury performance to the local market.

FSA: BMW is a luxury brand, but Pakistan is a developing country. Who are you catering to?

ZH: Pakistan may be a developing country, but there is significant wealth within its population. Many niche luxury brands have a presence here because the demand is there. The market exists, the money is there and people are buying. Our vehicles start from Rs 25 million and can exceed Rs 300 million.

FSA: How do you compete with the image of a typical ‘wadairay ki gari’?

ZH: BMW vehicles are designed for a niche market; mainly entrepreneurs and prominent businesspeople. The ‘feudal lords’ who purchase BMWs are the ones who live in the city, although roads are improving in the rural areas. While the infrastructure, particularly the roads in Karachi, can be challenging, Punjab has shown substantial demand. In the elite luxury segment, we command a market share of 35 to 40%.

FSA: How is the mix of internal combustion engine (ICE) vehicles versus electric vehicles (EVs) evolving?

ZH: We offer ICE, hybrids and battery EVs (BEVs). The current duty structure heavily incentivises EVs. For instance, a car costing €125,000 inflates to €300,000 due to the high duties but EVs benefit from lower tariffs, making them more cost-effective to import. Rising fuel prices and environmental incentives are also driving higher demand for EVs. However, tariffs have to be reduced further to introduce more EVs into the economy as affordability is still a challenge.

FSA: Is charging infrastructure a challenge for EV adoption?

ZH: Significant progress is underway to establish a robust charging infrastructure for EVs across Pakistan. Hubco, in collaboration with PSO, has initiated efforts to install chargers nationwide. An estimated 40 to 50 DC chargers have been strategically placed along motorways and could significantly boost EV adoption. Currently, not all EVs can access DC chargers, leaving many motorists to rely on plug-in AC alternatives typically available at home. However, setting up DC chargers is more expensive compared to AC chargers. AC chargers, operating at seven to 11 kWs, can take up to 12 hours to fully charge a vehicle, depending on battery capacity. In contrast, DC fast chargers can power an EV from empty to full within 30 minutes in a maximum of two hours. Dewan Motors is the first to install a DC charger on the Lahore to Islamabad route.

FSA: How does Dewan Motors market BMW in Pakistan?

ZH: BMW is not a mass market brand that customers just walk into showrooms and browse. We reach potential clients through cold calls, media campaigns and social media. Social media is particularly impactful. We also offer personalised services, such as visiting clients at their homes or offices.

FSA: How did the import restrictions during the economic crisis affect Dewan Motors?

ZH: It hit us hard – they were difficult times. As a result, the grey market thrived on the restrictions that held us back. Imports continued through informal channels, resulting in significant losses for the government in terms of tariff and tax revenue. The grey market exploits loopholes like the gift scheme or similar setups to bring in cars, bypassing formal procedures.

FSA: Given that the grey market pays lower tariffs and can reduce the price tag, why should customers go through official channels?

ZH: The grey market may offer lower prices, but it comes at a cost. There is no warranty, no service support, and no accountability. Most BMWs coming through unofficial channels are BEVs and these are not cars you can take to a neighbourhood mechanic. Dewan Motors has invested millions in developing our team’s skill sets to handle advanced technology. For example, there are only about a dozen high-voltage BMW experts worldwide, and we are proud to have one of them in Pakistan. Asghar, our specialist, is in a league of his own – not only in Pakistan but across the entire Middle East. Think of him as a flying doctor for BMWs – if there is a major issue, he is the one flying out to resolve it. Essentially, Dewan Motors is supporting BMW vehicles throughout the Middle East. Of course, it’s not only Asghar; we have an entire team of trained technicians who have undergone rigorous certifications and final tests in Germany and Dubai. That level of expertise is something the grey market cannot replicate.

FSA: Why can’t a mechanic around the corner handle these cars?

ZH: These cars are time bombs if not handled correctly. They cannot be handed over to any mechanic. People must understand that working on a BEV BMW is not like dealing with a regular car. One crossed wire can stop the vehicle entirely or, worse, lead to dangerous consequences. For instance, a BMW BEV has 48 specialised bolts that cannot be opened with ordinary tools. You need precision instruments that cost millions of rupees. These bolts have to be removed to access the battery pack, which is where the troubleshooting begins. Without the right tools and expertise, a single mistake could result in a serious safety hazard, even a potential explosion. These vehicles demand trained hands, and the investment in proper handling is non-negotiable. It’s not just about fixing the car; it’s about ensuring everyone’s safety.

FSA: Do these vehicles get regular software updates?

ZH: Absolutely. In the past, people would install pirated software and the car would keep running. Now, however, software updates have become much more frequent and skipping them can affect the car’s performance. A vehicle without the latest updates will not function as smoothly. This is also a major reason to avoid the grey market. Cars brought through unofficial channels do not have access to these updates, leaving owners stuck with outdated software and within a year, they will start experiencing functionality issues.

FSA: How popular are BMW motorcycles?

ZH: People appreciate the quality, safety features, and prestige of the brand, but it’s a competitive market. You have Chinese bikes priced at around three to four million rupees, while our BMW bikes start at nine million. At the higher end, a fully loaded BMW motorcycle can go up to Rs 28 million, depending on the accessories. Unlike cars, bikes are not used all year round – winter is their season. In summer, they often need to be transported to cooler northern areas for riding. We entered the bike segment in 2022 and so far, the response has been quite positive.

FSA: What challenges are you facing right now?

ZH: The increase in duties. The government had previously incentivised EV imports until 2026, so the changes in this year’s budget came as a surprise. The economic crisis is another hurdle and it is even affecting business elites. Take Faisalabad’s textile sector, for instance, which is struggling. Additionally, the cap on auto loans at three million rupees means that even if interest rates drop, this does not directly boost our sales since our vehicles fall outside that range.

FSA: What are Dewan Motors’ plans for the future?

ZH: We are aiming for 100% growth next year. Spending habits have evolved significantly. For instance, people who used to be comfortable spending four million rupees on a car are now willing to spend eight million. Similarly, buyers who previously considered Rs 10 million as their limit are now looking at Rs 25 million, and this is where we fit in. We are shifting our sales approach and recalibrating our focus to capitalise on this shift. With these changes, we are confident we can double our sales by 2025.

Fatima S. Attarwala heads Dawn’s Business & Finance desk.