KARACHI, June 21: Car production and sales are expected to increase by 50-53 per cent and 43-45 per cent, respectively, at the conclusion of the current financial year 2002-03 as compared to the fiscal 2001-02.

During July-May 2002-03, car production went up by 53 per cent to 55,375 units as compared to 36,290 units in the same period of previous fiscal, while sales soared by 45.55 per cent to 54,792 units as compared to 37,644 units in 11 months of 2001-02.

In view of the robust performance in July-May, the entire production of cars (Toyota Corolla, Honda Civic and City, Suzuki Mehran, Cultus, Alto and Baleno, Dewan Santro, Kia and Spectra, Daihatsu Cuore and Nissan Sunny) will range between 61,000 and 63,000 units at the end of current fiscal as compared to 40,601 units in 2001-02. Sales will hover between 61,000 and 64,000 units at the end of 2002-03 as compared to 42,341 units in 2001-02.

The boom in production and sales in the fiscal 2002-03 has been a record for the local car industry, which is dominated by the Japanese assemblers. In 1995-96, car production stood at 31,079 units, rising to 33,741 units in 1996-97. Production of cars in 1997-98, which was 33,684 units, jumped to 38,682 units in 1998- 99, but again fell to 32,451 in 1999-2000. Rolling out of cars started showing improvement in 2000-01 when production reached to 39,575 units owing to some improvement in economic indicators, gradual rise in arrival of home remittances from abroad, low interest rates and entry of banks and leasing companies in car financing.

In July-May 2002-03, overall economic growth became more attractive followed by record low auto financing rates offered by a host of banks and leasing companies, arrival of $3.8 billion from home remittances and introduction of new models, which fuelled up more buying enthusiasm among prospective buyers and even the investors. The demand had also outstripped supplies and companies had to increased their production, particularly makers of Corolla to meet rising demand. Due to huge sales auto companies’ share prices had also witnessed tremendous growth.

It is to be watched with added interest whether the boom in car demand will continue to dominate in the fiscal 2003-04 or the bubble will burst from January 2004. Market watchers seem to be confident in saying that the sales in the first six months of the new fiscal are expected to show positive growth in view of the current rising trend in new bookings, investors’ presence in the car market and frequent increase in arrival of home remittances. Pakistanis living in the US and the UAE are spending huge money in real estate, new cars and stock markets to safeguard their investment as well as get better returns.

According to data compiled by Pakistan Automotive Manufacturers Association (PAMA), in July-May 2002-03, 14,831 Suzuki Mehran 800cc were rolled out, depicting a rise of 66 per cent from 8,940 units in the corresponding period of 2001-02. Production of Toyota Corolla jumped by 125 per cent to 11,183 units in 11 months of the current fiscal from 4,977 units in the same period of 2001-02. A total of 2,778 units of Santro Plus came out from the plant in July-May as compared to 1,667 units in the same period of last fiscal, rising by 66 per cent. A jump of 49 per cent was recorded in production of Suzuki Cultus to 7,285 units in July-May 2002-03 from 4,896 units.

According to budget review of Invest Capital and Securities on car industry, the government had kept the import duty on completely knocked down (CKD) kits unchanged at 25 per cent as against the expectation of five per cent cut in import duty.