KARACHI: Overall car sales plunged 44 per cent to 40,586 units in July-October 2019, from 72,563 units in the same period last year.
Meanwhile, Honda Atlas Cars Pakistan Ltd (HACPL) has planned to work only seven days in November due to depressed demand and unsold stocks.
After witnessing a 70 per cent fall in Honda Civic and City sales during 4MFY20 to 4,961 units, sources in HACPL said the company still has unsold stocks of 2,400 units, thus signalling another struggling month for the Japanese assembler.
HACPL had observed 16-18 non-production days (NPDs) in October which was evident from output of only 857 units of Civic and City, as compared to 1,031 in September; 1,149 in August; and 2,371 in July.
The company had reduced working days to 11 in September as against 13 in August and 20 in July.
According to figures of Pakistan Automotive Manufacturers Association (PAMA), the massive fall in overall car sales came on the back of 76pc dip in WagonR sales to 2,698 units, followed by 72pc in Bolan sales to 1,505; 34pc in Cultus to 4,777; and Suzuki Swift by 63pc to 675.
Suzuki Alto 660cc with sales of 16,991 units in the last four months took away buyers of Cultus and WagonR.
Demand of Toyota Corolla, rolled out by Indus Motor Company (IMC), remained subdued owing to reports of 1,300cc variant replacement from Yaris in the first quarter of next year. As a result, Corolla sales came down by 60pc to 7,485 units versus 18,814 in same period last year.
Sources in IMC said the company would observe four to five NPDs during November while the plant has been operating on single shift since start of 2QFY20. It had observed 15 NPDs during September as against eight in July and 11-12 in August.
They said low number of NPDs in November reflect tougher period for the company as IMC was running two shifts during first quarter FY20. The company still has unsold stocks of 2,000 Corolla vehicles.
Pak Suzuki Motor Company Ltd (PSMCL) had so far not undertaken NPDs from July onwards despite massive decline in sales of WagonR, Cultus, Bolan and Swift. Alto660cc has been driving the company despite two price hikes — first in August by Rs137,000-Rs138,000 in VXR and AGS models and then by Rs70,000-85,000 from October 1.
Frequent increase in car prices had made buyers reluctant. Rates soared on account of rising cost of imported parts owing to falling rupee against the dollar, imposition of federal excise duty (FED) and additional customs duty on imports of raw material, making buyers hesitant towards locally assembled cars.
According to the State Bank of Pakistan’s Annual Report FY19, higher interest rates also changed the market environment for the automobile industry, as it escalated the financial costs for consumers. This is evident from banking data, which shows that consumer car financing declined to Rs22.2 billion in FY19, as against record lending of Rs43.3bn just a year earlier.
According to Hammad Akram of Topline Securities, Toyota Corolla sales increased in October to 1,982 units, from 1,795 due to different waiver schemes offered by IMC in collaboration with commercial banks.
Total truck sales tumbled 53pc to 1,110 units due to slowdown in economic activity followed by 16.5pc fall in buses to 259 units in 4MFY20.
Toyota Fortuner, Honda BR-V, Suzuki Ravi and Toyota Hilux sales declined to 367, 877, 1,980 and 1,351 during
July-October 2019, from 864, 1,816, 5,808 and 2,150 units respectively in same period last year.
Fiat and Massey Ferguson tractor sales came down by 13pc and 51pc to 5,323 and 6,823 units, respectively.
Published in Dawn, November 13th, 2019