KARACHI: The country’s auto sector ended the fiscal year 2018-19 on a dismal note owing to massive devaluation of the currency, introduction of new taxes, high interest rates and rising fuel prices.
The sector saw arrival of some new models including Suzuki Alto 660cc car, JAC and D-Max pickups from existing and new manufacturers helping lift up overall auto sales.
However, despite unfriendly market conditions, Toyota Corolla, Suzuki Cultus and WagonR performed relatively better but failed to arrest the overall decline in auto sales which fell to 207,630 units; down 4.2 per cent compared to 216,789 in FY18.
Total sales of Toyota Corolla, Suzuki Cultus and WagonR reached to 56,720, 22,763 and 32,614 units respectively in the last fiscal year compared to 51,412, 20,483 and 29,206 units.
Slump in Suzuki Mehran and Bolan sales, thw tow models which usually made up for the largest chunk of total auto sales in the country, made a significant impact.
Moreover, Pak Suzuki Motor Company (PSMC) shut down production of Mehran’s two models – one in November 2018 and second in April. As a result, Mehran sales plunged to 31,981 units from 46,221 whereas those of Bolan dropped to 17,628 units as against 21,738 against FY18.
Production of the most anticipated model Suzuki Alto started off with 1,472 units in July while sales in the same month stood at 1,685 units.
Honda Civic/City sales declined to 39,189 units from 42,810 while Suzuki Swift sales inched up to 5,050 units from 4,916.
Sales of buses — Hino, Master and Isuzu — improved to 935 units from 762, while truck sales, dubbed as country’s barometer for economic activity, fell to 5,823 units from 9,331 in FY18.
Toyota Fortuner and Honda BR-V sales came down to 2,609 and 5,045 units respectively compared to 4,186 and 8,684 units.
D-Max vehicle production began from February and total FY19 sales stood at 400 units.
On the other hand, tractor sales plummeted on the back of decline in agriculture growth as Fiat and Massey Ferguson sold 17,993 and 32,018 units respectively compared to 27,839 and 42,707 units in FY18.
In two and three wheelers segment, sales of Honda bikes fell to 1.114 million units versus 1.150m in FY18 while those of Suzuki and Yamaha rose to 23,352 and 23,610 units from 21,724 and 21,810 units respectively.
Sazgar and United three-wheeler sales stood at 15,845 and 11,666 as compared to 21,978 and 12,642 units.
Asad Ali, an analyst at the BMA Capital Management said the sector would continue to face headwinds from existing macro environment where FY20 auto sales are expected to stand at 203,000 units, a drop of 15 pc.
Shajar Research opined that the auto sector’s sales declined by 9pc year-on-year in FY19 to 1.76m units due to rupee’s decline against the dollar by 31pc, restriction on non-filer customers in 1HFY19, rise in interest rates to 12.25pc and multiple price hikes by manufactures during the year.
Trucks sales slumped mainly on account of decline in infrastructure and commercial activities coupled with shrinking economic activity.
Published in Dawn, July 12th, 2019