KARACHI: Car manufacturers had a blissful 2014-15 as they saw sales jump to 151,134 units from 118,102 in the preceding fiscal year.
The launch of new Toyota Corolla brought a big relief to its assembler, pushing up the company’s sales to 51,398 units from 29,087 and also making a positive impact in overall sales figures, Pakistan Automotive Manufacturers Association (PAMA) said on Friday.
Another uplift in overall sales came from Punjab government’s taxi scheme that helped sales of Suzuki Bolan rise to 23,582 units from 14,088, and that of Suzuki Ravi to 22,815 from 12,419.
Even increase in car prices by the manufacturers did not dampen buyers’ enthusiasm. Moreover, a decline in interest rates to seven per cent from 10pc by the State Bank of Pakistan (SBP) in the last one year also pushed up sales by at least 10pc on cars being sold under bank financing.
Launched in March 2014, Suzuki Wagon R compensated the 32pc sales loss in Swift. Wagon R’s sales more than tripled to 5,246 units in FY15 from 1,621 a year ago, while Swift sales dropped to 3,490 from 5,128.
Facing stiff competition with thriving used-car imports of small engine power, Suzuki Mehran sales slightly inched up to 29,886 from 29,509 units, while Cultus sales fell to 13,837 from 14,682.
The just-ended fiscal year proved a bit difficult for Honda Civic in the wake of Toyota Corolla’s launch, as its sales dropped to 7,806 units from 9,933 in FY14.
Pak Suzuki Motor Company Limited (PSMCL) did not officially announce halt in Liana production despite the fact that no car was rolled out during FY15. However, sales from old stocks stood at 23 units in 2014-15 compared to 161 a year earlier. Only 72 Lianas were produced each in October and December 2013.
Hyundai Santro also faced the same fate as only 82 and 128 units were produced in January and February 2014, respectively, while no car was assembled in the 2014-15. Its sales from some old stocks were 50 units in FY15 compared to 152 in FY14.
Muhammad Tahir Saeed of Topline Securities said local car assemblers registered “an excellent” year-on-year growth of 31pc during FY15 versus just 1pc growth in FY14 and a compound annual growth rate (CAGR) of 5.3pc during the last five years (FY11-15).
He attributed the higher sales of cars, and also of jeeps, LCVs and vans, to rising consumer sector dynamics and an increase in car financing due to 42-year low interest rates in the country. He said imports of used cars are still hovering around 25,000 to 30,000 units a year. The imports make around 15pc of car sales market in Pakistan.
Local car sales are expected to grow by 13pc in FY16, he said, adding that healthy growth in the auto sector reflects increase in per capita income, improved farmer economics and overall recovery of the economy.
Saeed said volumetric growth coupled with a weak Japanese yen against the US dollar “will have a positive impact on the sector’s profitability”.
The PSMCL would sell around 30,000 to 35,000 units under taxi scheme in FY16 and order of 50,000 units would be completed in the first half of FY17, he said. According to his estimate, Suzuki’s sales volume should grow by 24pc in FY16 to 122,617 units.
The Indus Motor Company (IMC), the assembler of Toyota Corolla, achieved its highest ever sales since the inception of the company, selling 56,943 units in FY15, a year-on-year growth of 67pc. Given its annual production capacity of 54,800 units, the company achieved these figures through de-bottlenecking and working on alternate Saturdays.
TRACTORS: Tractor segment (Fiat, Massey Ferguson and Orient IMT Tractors) posted a healthy on-year growth of 39pc during FY15 by selling 46,800 units, primarily due to reduction in general sales tax (GST) from 16pc to 10pc announced in the previous budget. This compares favourably with 34pc growth in FY14 and five-year (FY11-15) CAGR of 9.3pc.
The government’s decision to maintain GST at 10pc in the latest budget coupled with subsidy schemes of 25,000 tractors by the Punjab government and 29,000 tractors by the Sindh government are likely to help tractors sales keep the momentum going.
Saeed anticipated a 17pc increase in tractor sales in FY16 on the back of these subsidy schemes.
Published in Dawn, July 11th, 2015