LAHORE: The country’s car assembling industry has witnessed a mammoth growth of 129 per cent YoY as 15,909 units were sold in July 2015.
It is pertinent to mention here that last year in the same month, sales dropped abnormally due to increase in advance motor vehicle tax and imposition of advance income tax on transfer of motor vehicle in Federal Budget FY15.
However, tractor segment posted a decline of 41% YoY during July 2015 to reach at 1,634 units. Experts attribute this decline to floods led by heavy rains in the country and extended Eid holidays. However, Govt’s decision to maintain GST at 10% in the current federal budget FY16 will support the growth momentum in tractors volumes.
Overall healthy growth in auto sector is indicative of increase in per capita income, improved farmer economics and overall recovery of the economy. Car financing is also picking up gradually (currently estimated at 30% versus 5% few years back). To recall, car sales in Pakistan grew at a 5-year (FY11-15) CAGR of 5.3% to 179,953 units while volumes surged by 31% in FY15 on the back of new model of Toyota Corolla, Taxi Scheme of Punjab Govt. and an increase in car financing due to 42-year low interest rates in the country.
Indus Motors sold 4,259 units in Jul 2015 compared to 1,106 units in the same month last year. It is pertinent to note that customers were waiting for the new model of Toyota Corolla in the same month last year which was the main reason for abnormally low base.
Honda Cars sold 2,181 units in Jul 2015 compared to 1,505 units in the same month last year. On Month-on-Month basis, HCAR sales decreased by 12% in Jul 2015 from 2,488 units in Jun 2015.
