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Car Sales Crash With Over 50% Decline Due to Poor Demand and Purchasing Power

Pakistan car sales clocked in at 6,200 units down 26 percent month-on-month (MoM) and 54 percent year-on-year (YoY).

Including non-PAMA members, car sales clocked in at ~7,000 down 26 percent MoM and 53 percent YoY, according to data by Pakistan Automotive Manufacturers Association (PAMA).

The MoM decline in car sales is due to disruptions in the supply chain followed by lower demand, however, escalating car prices, expensive auto financing, and the low purchasing power of consumers contribute to the decline in YoY sales, said Topline Securities in a review of the sector.

In 4MFY24 PAMA car sales recorded 27,163 units down 44 percent YoY compared to 48,573 units in 4MFY23.

Honda Car (HCAR) and Indus Motors (INDU) were the worst performers where sales were down 66 percent MoM and 34 percent MoM respectively amid the shutdown of their plant due to inventory shortages.

Pak Suzuki (PSMC) recorded sales of 3,810 units down 10 percent MoM in October 2023. Similarly, Hyundai recorded sales of 377 units down 54 percent MoM in October 2023. Hyundai’s newly launched Santa FE recorded sales of 175 units in October 2023.

Amongst Tractors, Al-Ghazi Tractors (AGTL), and Millat Tractors (MTL) recorded a decline of 5 percent MoM and 49 percent MoM, respectively, in October 2023. This takes total tractor industry sales in 4MFY24 to 17,296 units, up 87 percent YoY due to the low base of last year amid floods.

Meanwhile, bike sales were down 5 percent MoM and 11 percent YoY in October 2023. Atlas Honda (ATLH) recorded sales of 90,000 units, down 5 percent MoM and 5 percent YoY. This takes total industry sales to 371,000 units in 4MFY24 down 10 percent YoY due to higher bike prices, and the low purchasing power of consumers.

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