KARACHI, Nov 11: While sale of cars and light commercial vehicles has been hitting the bottom, followed by massive job cuts by its vending industry, local heavy vehicle industry also fears job cuts in case sales continue to fall in the coming months. The recession has also knocked the heavy vehicle industry where sales and production have been showing a downward trend for the last few months.

Hinopak’s sales of trucks in July this year was 180 units falling to 176 in August and down to 149 units in September, making a total of 505 units in July-September 2008 as compared to 529 in the same period of last year.

Similarly, Nissan truck’s sales were 79 units in July, declining to 34 units in August and fell further to 11 units in September, making cumulative sales of 124 units in July-September 2008 as compared to 207 units in the same period of last year. Total sales of Isuzu trucks also fell to 91 units in July-September 2008 from 183 units in the corresponding period of 2007, while sales of Master trucks managed to show some growth rising to 113 units in July-September 2008 from 67 units in the same period of 2007.

Director Sales and Marketing Hinopak Motors Limited (HML), Mohammad Irfan Shaikh said: “We have not yet cut the jobs but in case the sales remain depressed for the next few months, we will have to think to reduce employment.” Hinopak currently has a total staff and workers strength of 1,700.

He said that demand of heavy vehicles dropped by 60 per cent from September owing to country’s economic conditions, only 10-15 per cent banks’ financing and devaluation of rupee against the dollar and surging Yen against the dollar. The rupee lost its value against the dollar by at least 25 per cent this year.

Irfan said that his company has increased prices of vehicles by 35 per cent from January to November this year. In buses, the production of Hinopak continued to decline. Hinopak produced 84 buses in July falling to 54 units in August and further fell to 12 units in September, making a total of 150 units in the first quarter of the current fiscal year as compared to 270 units in the same period of last fiscal. Sale of buses in July-September 2008 fell to 148 units from 266 units in the corresponding period of last year.

Nissan and Master have not produced any buses during July-September 2008 as compared to 12 units and one unit respectively in the same period of 2007.

While the local heavy vehicle industry finds itself in the doldrums, the government plans to import new CNG buses from India and China. Even the government has plans to import 10 year old CNG buses from India.

Irfan Shaikh said that when the local industry has the capacity to produce CNG buses in Pakistan, there is no need for import of buses from the neighboring countries. The import of used CNG buses will make the country a junkyard.

Senior Executive Director Marketing and Sales, Ghandhara Nissan Limted, Moazzam Pervez Khan said that so far the company had not undertaken any downsizing, but much depends on the future sales and production. He added that the sales of heavy vehicles plunged by 60 per cent in August and October this year.

He, however, said that under the current economic meltdown, the company has to postpone the launching of locally made Nissan Sunny cars (1,300-1,600cc) to February 2009 as against the plan to launch it in December this year.

Meawwhile, sale of locally assembled cars (Indus Motors, Pak Suzuki, Dewan Motors and Honda) fell by 44 per cent to 28,665 units in July-October 2008 as compared to 51,454 units in the same period of 2007.

If cars or light commercial vehicles (LCV) figures are taken, the combined sales declined by 37 per cent to 40,474 in the first four months of the current fiscal as compared to 63,765 units in the same period of last fiscal.

On month-to-month basis, the story was different as car sales in October went up to 9,599 units as compared to 7,889 units in September 2008, up by 22 per cent. Similarly combined sale of LCV/cars surged by 33 per cent to 13,340 units in October 2008 as compared to 10,037 units in September 2008.

According to analyst Syed Atif Zafar at JS Research, high rates of car financing, increase in prices and economic slowdown remained key issues behind car sales fall. The increase in sales in October 2008 over September 2008 was mainly due to increase in sales of Toyota Corolla and Suzuki Ravi.

He said growth in Corolla was mainly due to low base effect as Indus Motors had halted its production for the launch of new model in August.

Moreover, relative stability on the political front and no negative news for the auto industry helped in the improvement in sales.

Meanwhile, a vendor who asked not to be named said that the Indus Motors has cut down its production schedule to 25,000 units in the current fiscal as against the target of 35,400 units.