Sales Plummet as Car Companies Continue to Announce Huge Price Hikes

The recent price hikes have evidently started affecting car sales in Pakistan negatively. As per a recent report from Pakistan Automotive Manufacturer’s Association (PAMA), the auto sector recorded a total of 22,370 car sales in April, recording a Month Over Month (MoM) decline of 18 percent and a Year Over Year (YoY) increase of 30 percent.

In April, Toyota Indus Motor Company (IMC) sold 5,775 units and witnessed an MoM decrease of 18 percent and a YoY increase of 8 percent in sales. Hyundai Nishat Motors Private Limited (HNMP) sold 1,287 cars in the same period, observing a minor MoM decrease of 1 percent and a YoY increase of 44 percent.

HACL sold 2,629 cars, recording an MoM decrease of 28 percent, and a YoY increase of 15 percent, while PSMC sold 12,639 units and observed an MoM decrease of 16 percent and a YoY increase of 47 percent.

The sales figures of some popular vehicles in Pakistan are as follows

Passenger Vehicle Sales (PAMA Members Only)
Passenger Vehicles Units Sold in March 2022 Units Sold in April 2022 Month on Month %age Difference
PSMC
Cultus 306 1,745 470%
Alto 9,814 5,009 -49%
Wagon R 2,104 1,823 -13%
Bolan 1,295 860 -34%
Swift N/a 2,273 N/a
Toyota IMC
Corolla 3,490 2,444 -29%
Yaris 1,905 1,655 -13%
Fortuner 736 723 -2%
Hilux 1,134 935 -18%
Honda Atlas
City & Civic 3,278 2,265 -31%
BR-V 373 364 -2%
Hyundai Nishat
Tucson 576 553 -4%
Sonata 250 293 17%
Elantra 357 240 -33%

Current Market Condition

The recent price hikes have irked the ire of the government, which has summoned automakers to explain the cost structure.

In a meeting that took place yesterday, the Ministry of Industries and Production (MoIP) raised serious objections regarding car manufacturers not providing their respective cost structures. It argued that the rate of price hikes is much greater than that of the US Dollar (USD) value hike against the Pakistani Rupee (PKR).

Automakers were adamant that they have no choice but to increase the prices of their cars due to rising raw material costs, shipment costs, and devaluation of local currency.

Representatives of various car companies claimed that the increased freight charges in the global market also prompted price hikes. They underlined that a freight container that previously cost $3,000, now costs $6,000.

Company representatives also stated that the ongoing political situation is also taking a toll on the car industry. Automakers have increased investment in the sector but are not getting returns accordingly, they added.

Conclusively, MoIP directed the carmakers to submit their respective cost structures within two days and announced that another follow-up meeting in this regard will be held soon.



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