KARACHI, June 18: Car production of some assemblers has shown a decline in May as compared to April figures despite clear warning from Commerce Minister, Abdul Razzak Dawood two months back asking them to increase the production to overcome demand.

According to figures of Pakistan Automotive Manufacturers Association (PAMA), production of Honda Civic declined to 356 units in May as compared to 415 units in April followed by fall in sales also to 370 units last month from 490 units in April.

However, a total of 386 units of Honda Civic were rolled out from the plant in May as compared to 342 units in April.

Production of Toyota Corolla dropped by 10.7 per cent to 625 units in May as compared to 700 units in April, while sales also caved in to 684 units last month from 723 units in April.

Dewan’s Kia Classic and Spectra production plunged to 25 units in May from 243 units in April while sales registered at 103 in May as compared to 243 units in April. Santro Plus production fell to 150 units from 307 units in April while sales recorded at 173 units in May from 227 units in April.

A total of 119 Suzuki Baleno were assembled last month as compared to 124 units in April. Sales surged to 186 units last month from April’s 130 units.

Suzuki Cultus production remained at 505 units last month as against 457 units in April. A total of 520 vehicles were sold as against 501 units in April. Alto 1000cc production declined to 260 units in May from 329 units in April. Sales of Alto rose to 331 units from 274 units in April.

Suzuki Mehran production continued to show a rise up to 1,152 units in May from 1,102 units in April. Sales also moved up to 1,151 units from 1,101 units.

Daihatsu Cuore production rose to 290 units from 287 units while sales came down to 288 units in May from 307 units in April.

An executive in Pak Suzuki said that drop in production of some Sedans was due to increase in carryover stocks otherwise the company has been following the government’s guidelines.

A leading assembler said that the demand spurt, that came two to three months back, had slightly dwindled to some extent in May, forcing assemblers to slow down the production.

Car demand has suddenly got a boost in a few months following introduction of new Corolla and Baleno models. New Sedans had started selling on premium prices ranging between Rs100,000- 300,000.

According to the third quarter State Bank Report (2001-2002), the price as well as premium on the prompt delivery out of the dealer’s stock, had increased due to transitional delays and a massive increase in bookings of the new Corolla model. This profitable turn in the market might have induced other assemblers to change their business strategies as well. As a result premium on older models were also increased.

The State Bank report said that instead of passing on the benefit of reduced production costs to consumers, the manufacturers used the opportunity to improve profitability.

The report said it has been alleged that some manufacturers kept production below orders and delayed deliveries, creating an artificial shortage. The auto industry heavily depends on the imported completely knocked down (CKD) kits and other precision engineering parts. Therefore, appreciation of the rupee resulted in a lower rupee cost of imports and thereby lower import duty collections.

An auto analyst at First Capital Research expects a growth of eight per cent in car production to 41,888 units when fiscal year 2001-2002 concludes this month. According to PAMA figures, in July-May 2001-2002, a total of 36,290 cars have already been rolled out.

He said the sharp upswing in consumer finance (especially for vehicles) has led the latent demand for the auto industry. Orix, Askari and NDLC have more than doubled their auto exposure to Rs11.5 billion from Rs6.2 billion in 1999-2000.