Pakistan Automotive Manufacturers Association (PAMA) has reported a steep decline across the automotive sector during the initial nine months of fiscal year 2024 (July to March). According to the data released by PAMA, the Pakistan automotive industry witnessed a sharp decline in sales, with passenger car sales plummeting by 36.9% as only 54,089 units were sold.
The downturn in car sales can be attributed to multiple factors; including soaring inflation, diminished purchasing power, high interest rates, expensive auto financing, and rising car prices. These challenges have significantly impacted consumer confidence and their ability to invest in new vehicles.
Furthermore, PAMA reported notable declines in other automotive segments, with truck sales dipping by 45.2% and bus sales by 39%. Sales of SUVs and pick-ups also experienced a decline of 40.3%, while two and three-wheeler sales saw a relatively smaller decrease of 9.9%.
In contrast, the tractor industry witnessed a surge in sales, with an increase of 65.8% and 35,199 units sold during the same period. While this may indicate some resilience in the agricultural sector, analysts caution that the overall automotive industry remains in crisis.
Experts attribute the instability in the national economy to political unrest following the 2024 general elections. With escalating car prices, consumers have shifted preferences towards more affordable options, including used imported cars.
Mashood Khan, an auto sector expert, emphasized the need for proactive government intervention to address industry challenges. He suggested engaging Chinese bus manufacturers to establish local manufacturing units, which would facilitate technology transfer, job creation, and a reduction in import bills.
Khan stressed that simply importing cars or buses would not suffice to address transportation issues, given the country’s limited foreign exchange reserves. He urged the government to prioritize industrial policy reform and incentivize local production to navigate through these turbulent times effectively.
