Inflation and operational challenges have finally caught up with the local car industry as Toyota Indus Motor Company (IMC) recorded a monthly sales decline of around 60 percent in July 2022.
According to an industry source, the company sold just over 2,370 units in July 2022. This marks the first time since the first wave of COVID19 in 2022 that IMC has sold fewer than 2,500 units in Pakistan.
The company’s worst ever figure was recorded in May 2020 — at around just 500 units — which took place during the first COVID-19-induced countrywide lockdown.
The company is currently observing non-production days (NPDs) due to the non-approval of Letters of Credit (LC) from the State Bank of Pakistan (SBP). This step from SBP has stalled vehicle assembly operations, resulting in delivery delays.
The company later stated that it will completely refund the booking amount along with a 100 percent markup. It also highlighted that those who’d like to keep their bookings will have to wait much longer than the original delivery timeline, and pay extra in case of a price hike.
Also, in its latest financial briefing, Honda Atlas Cars Limited (HACL) predicted a damaging month for the entire auto sector. The company expected a 25-35 percent decline in sales due to price hikes, delivery delays, and production cuts.
It claimed that 40 percent of its total sales are from consumer financing. However, that percentage will likely decline to 30% due to high-interest rates, the automaker predicted.
All automakers are likely to experience diminished demand due to crippling inflation, price hikes, and major delivery delays.
