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Car sales fall in eight months

Updated March 12, 2019


Cars on display outside a showroom in Lahore in this photo.—AFP/File
Cars on display outside a showroom in Lahore in this photo.—AFP/File

KARACHI: Sale of locally assembled cars in the eight months of current fiscal year declined by 1.3pc to 140,462 units from 142,383 units during the same period last year according to data released by the Pakistan Automotive Manufacturers Association (PAMA) on Monday.

The decline is mainly attributable to lower working days in February coupled with persistent declining trend in sales of Suzuki Mehran and Bolan – which contributed big volumes to total auto sales.

Rising vehicle prices on rupee-dollar parity, soaring petrol and diesel prices and higher interest rates are likely to affect auto sales in the coming months as in a month on month comparison, sales in February dropped to 17,071 units from 19,353 units in January.

During the period under review, in the 1,300cc and above category, total sales clocked in at 70,232 units as against 64,143 last year.

Suzuki Mehran and Bolan sales plunged to 22,460 and 11,385 units from 30,903 and 14,704 taking the total drop in 800cc and below 1,000cc segment to 33,845 in the eight months from 45,607 units in same period last fiscal year.

The last eight months proved a disappointment for light commercial vehicles, vans and jeeps segments. Toyota Fortuner, Honda BRV, Suzuki Ravi and Toyota Hilux sales fell to 1,843, 3,317, 12,300 and 4,318 from 2,287, 6,260, 14,690 and 4,734 units respectively.

In line with the rising trend, total bus sales soared to 647 in the last eight months from 420 units with Hinopak taking the lead with 305 units versus 179 units.

Truck sales during July-Feb plummeted to 4,289 units from 5,859 units in which Hinopak, Master and Isuzu sales stood at 1,458, 842 and 1,989 as against 2,584, 907 and 2,350 units respectively.

Tractor sales continued its downward trajectory as Fiat and Massey Ferguson sales came down to 11,243 and 20,472 from 17,686 and 26,772 units in 8MFY18.

Despite frequent price rise in two wheelers on the back of falling rupee value against the dollar, sale of Honda, Suzuki and Yamaha surged to 733,918, 15,689 and 16,893 from 729,659, 14,007 and 13,266 units in July-Feb 2017-2018.

Pakistan’s auto sector to struggle: Fitch According to Fitch Solutions, Pakistan’s auto sector is likely to struggle in FY19 and FY20 as the sector’s over-reliance on Chinese investment comes to fruition.

A slowdown in Chinese investment would have a significant impact on heavy commercial vehicles (HCV). Passenger vehicle sales would fare better as the removal of non-income tax filers’ vehicle purchasing restrictions provide some relief and stem some of the pressures coming from the slowdown in investment inflows.

Amid slowing investment, and by extension weakening consumer sentiments, Fitch has revised down its forecast for new vehicle sales in FY19 and FY20 to a 2.4 per cent contraction and 1.3pc growth respectively, down from 7.3pc and 10.6pc growth forecast previously.

Foreign investment in the country, of which 30pc comes from China, has decreased by 74.8pc YoY over the first seven months of current fiscal year, says the report. Chinese investment, primarily as part of China-Pakistan Economic Corridor, has slowed down by 28.4pc YoY.

The research agency believes that this slowdown in investment would have a detrimental impact on the country’s commercial vehicle segment especially in HCV segment. The report forecasts total commercial sales to grow by only 4.9pc in FY19, while light commercial vehicle sales to remain relatively unscathed and expand by 11.8pc while HCV sales to contract by 18.1pc over the same period.

The change in government’s policy would only offer marginal support to the demand for passenger vehicle sales as the majority of non-filers remain poor and unable to afford new vehicles, adds the report. New passenger vehicle sales would contract by 3.6pc in FY19 and remain stable in FY20, growing only 0.6pc, Fitch said.

Toyota raises prices

Indus Motor Company jacked up price of Toyota Corolla 1.8 variants and Fortuner on March 11 owing to 10pc federal excise duty on vehicles above 1,700cc.

Published in Dawn, March 12th, 2019