KARACHI: Non-production days, long Eid ul Fitr holidays, and a decline in purchasing power have pushed the passenger car sales down by 85% year-on-year.
The data released by the Pakistan Automotive Manufacturers Association (PAMA) showed that passenger car sales fell to 2,844 units only against 18,626 units in April 2022.
Cumulatively, in the first 10 months of the fiscal year 2022-23 (10MFY23), a total of 88,620 units were sold, down 54% against 191.238 units sold during the same period in the fiscal year 2021-22.
Arif Habib Limited attributed the decrease in sales to a decline in demand mainly on the back of massive hikes in interest rates, spiralling automobile prices, repeated plant shutdowns, escalating petroleum prices, and reduced consumer affordability.
On month-on-month bases, sales in April remained lower by 60.5% compared with the 7,201 units sold in March. During this period, sales of 1300cc and above cars were recorded at 1,585 units, down 83% compared with the same month of the previous year’s sales of 9,189 units.
In April, 1,000cc cars recorded sales of 276 units only, (177 units of Suzuki Cultus and 99 units of Suzuki WagonR) against 3,568 units in the same month last year.
Below 1,000cc vehicles recorded a sale of 983 units, lower by 83% against 5,869 units last year. Suzuki’s new Alto sold 820 units in April 2023, compared with 5,009 units in April 2022.
Buses and trucks saw a decrease to 152 units in April 2023 from 472 units in the same month last year. The sale of jeeps and pick-ups decreased to 1,619 units from 3,917 units sold during the same period last year.
Sales of tractors dropped to 3,211 units from 4,848 units in April 2022. However, it remained month-on-month higher than 2,984 units sold in March. The sale of rickshaws and motorbikes also decreased to 82,136 units in April 23 against 151,705 units in the same period last year.
Sunny Kumar, an analyst at Topline Securities, said the auto sales in April were the lowest monthly sales recorded since May 2020 when a lockdown was imposed to curb the spread of COVID-19. Non-PAMA members’ car sales clocked down 47% month-on-month.
Kumar said the monthly decline was primarily due to a seasonal slowdown in the month of Ramadan, lower working days amid the Eid holidays, and the non-availability of completely-knocked down (CKD) parts on the letter of credit issues.
The 10MFY23 sales were down primarily due to the non-availability of CKDs, escalating car prices, expensive auto financing, and the low purchasing power of consumers.
Company-wise breakdown
Honda Atlas Car (HCAR) recorded the highest decline of 75% month-on-month to 207 units in April led by a decline in sales of City and Civic by 74% month-on-month.
Similarly, Pak Suzuki also posted a decline of 74% on a monthly basis to 1,474 units primarily due to the reasons mentioned above.
Moreover, auto financing declined consecutively for nine months with the March figure down by 12.83% year-on-year, to record Rs317 billion.
“It is worth noting that auto financing used to contribute significantly, accounting for 30% to 40% of total auto sales, but it has now dropped to zero,” Arif Habib Limited said.
