Pakistan Automotive Manufacturers Association (PAMA) on Wednesday revealed that car sales in Pakistan experienced a 10% increase in September when compared to the previous month, with a total of 8,312 units sold.
While this short-term boost is attributed to improved access to raw materials, the year-on-year statistics indicate a significant 26% decline in sales for the same period, showcasing challenges in the local automobile industry.
Month-to-month improvement
The positive momentum in car sales in September is reminiscent of the preceding month, when August witnessed an even more impressive 49% increase in car sales.
According to Waqas Ghani, Deputy Head of Research at JS Research, this upswing can be primarily linked to automotive manufacturers having easier access to raw materials. Ghani also noted that the relaxation of regulations concerning Letters of Credit (LCs) for imports played a pivotal role in this positive trend.
Year-on-year decline
However, despite the monthly gains, the Pakistan automobile industry is grappling with severe demand challenges. High car prices, costly auto financing, and an uptick in taxes have collectively contributed to a substantial 26% YoY decline in car sales when compared to the same period last year.
Sunny Kumar, Deputy Head of Research, pointed out that while car sales did increase on a monthly basis due to improved import conditions for Completely Knocked Down (CKD) kits, the long-term scenario remains grim. Escalating car prices, expensive auto financing, and the low purchasing power of consumers are identified as the primary culprits behind the year-on-year sales decline.
Company-wise performance
- Honda Atlas Car reported a remarkable 99% MoM increase, reaching 1,342 units in September, mainly due to a low base from the previous month.
- Pak Suzuki was the only company that recorded a 1% MoM decline in sales, with Alto sales dropping by 8% in September. However, other variants including Ravi, Bolan, and Cultus experienced notable increases of 58%, 38%, and 9% respectively, while Swift and Wagon-R sales remained relatively unchanged.
- Hyundai sales increased by 5% MoM, partly due to a 48% increase in Porter sales.
- Indus Motor, responsible for assembling and selling Toyota vehicles in Pakistan, saw a 3% increase in sales compared to August, with Fortuner and Hilux reporting a 27% increase on a monthly basis.
Amongst tractors, Al Ghazi Tractors (AGM) and Millat Tractors (MTL) recorded impressive MoM increases of 50% and 29% respectively, contributing to a 64% YoY growth in total tractor industry sales in the first quarter of fiscal year 2024, largely due to a low base from the previous year amidst floods.
Trucks and buses sales were up by 11% on a monthly basis but experienced a significant 51% YoY decline to 185 units.
On a more positive note, Pakistan's bike sales rose by 21% MoM and 8% YoY in September, with Atlas Honda (ATLH) leading the way, recording sales of 95,056 units, which is higher by 27% MoM and 12% YoY.
