Car sales rose 16.3% to 201,134 units during the first 11 months of the current fiscal year of 2017/18, industry data showed on Tuesday, as a low-interest rate and growing demand from cab schemes boosted auto sales.
Pakistan Automotive Manufacturers Association’s (Pama) data showed that car sales stood at 172,911 units in the July-May period of the last fiscal year. Analysts said rising auto financing, various cab schemes and improved economic indicators drove strong sales in growth by auto assemblers.
Auto assemblers endured a drop of 15% in car sales in May 2018 on a month-on-month basis on the back of increase in vehicle prices and the government’s restriction on non-filers of income tax returns that now cannot buy a new car and the production slowed down due to reduced working hours in Ramadan.
Amongst assemblers, Pak Suzuki was the key laggard with a MoM sales decline of 21%, which is likely due to the restoration of previous import vehicle policy, resulting in an influx of imported used cars.
Similarly, Honda’s sales went down by 9% YoY and 8% MoM to 4,252 units. Pama’s data showed that the 1,300cc and above auto segment recorded sales of 92,299 units in the July-May period as compared to 88,434 units.
Car segments of 800cc as well as below 1,000cc logged sales of 63,188 units during this period when compared with 53,232 units last year. Sales of cars of 1,000cc increased to 45,647 units from 31,245 units.
Pama recorded car sales of 18,223 units in May, up 4.2% year-on-year. On a month-on-month basis, May’s car sales, however, fell from 21,540 units as Ramazan season generally causes a slowdown in sales.
The positive development in auto sales was largely driven by a remarkable performance by Indus Motor Company, which outperformed the market as sales of Corolla and Fortuner stayed strong.
Indus Motor outperformed the competitors as its Corolla and Fortuner sales remained strong. Indus recorded sales of 4,676 units of Toyota Corolla in May as compared to 4,220 units in the corresponding month a year earlier.
During the July-May period, Corolla sales, however, declined to 47,866 units as compared to 49,667 units for the corresponding period a year ago.
The outgoing month remained a weak spot for across-the-board offerings as sales went down for some car segments. According to sources, an upgradation process for the assembly line resulted in dampened production of cars for the outgoing month.
Strong sales in Swift, Wagon R, and Ravi drove overall growth for Pak Suzuki. Sales of Honda cars marginally fell to 3,750 units in May as compared to 3,784 units in the same month a year earlier.
BRV sales stood at 502 units in May as compared to 876 units a year earlier. In the July-May period, BRV sales increased to 7,999 units compared with 1,403 units a year earlier.
Sales of tractors maintained the upward swing following the decision of the government during the fiscal year 2017/18 to reduce the sales tax. Sales of tractors increased to 6,753 units in May as against 5,663 in the same month a year ago.
In July-May, sales of tractors sharply rose to 66,992 units from 50,546 units a year earlier. Data available with PAMA showed that two-wheelers and three-wheelers recorded tremendous growth of 17 percent to 1.7 million units in the July-May period over the corresponding period a year earlier.
Auto dealers said that sales of two and three wheelers are witnessing a healthy increase due to lack of a viable transport system, especially in the financial hub of Karachi.
Similar to the automobile market, motorcycle sales in the country are also showing double-digit growth mainly due to macroeconomic stability and higher disposable incomes.
Sales have grown on the back of a strong demand for cheap transportation in fast urbanizing cities and towns. The unrelenting surge in local and imported motorbikes is an indicator of where demand is headed in the future.