Low interest rates rev up auto sector growth

Published May 18, 2021
Backed by low interest rates, the auto sector posted a positive performance in the first 10 months of the current fiscal year with the jeep segment achieving highest sales growth of 193 per cent. — Reuters/File
Backed by low interest rates, the auto sector posted a positive performance in the first 10 months of the current fiscal year with the jeep segment achieving highest sales growth of 193 per cent. — Reuters/File

• Total car sales rise to 126,679 units in 10MFY21
• Limited factory hours during Ramazan result in drop of auto sales month-on-month in April

KARACHI: Backed by low interest rates, the auto sector posted a positive performance in the first 10 months of the current fiscal year with the jeep segment achieving highest sales growth of 193 per cent.

Sales of tractors were up 62pc followed by 57.5pc increase in light commercial vehicles (LCVs), cars 48.5pc, two and three-wheelers 34pc, trucks 7.7pc and buses by 5.6pc in 10MFY21.

Low interest rates emerged as one of the main reasons in propelling the auto sector sales — especially cars, LCVs and pickups — and thereby taking up the share of auto financing to 40-60 per cent of total car sales depending on the assemblers. Rising car prices did not cause any serious hit to the buying sentiments of consumers who were more interested in getting the vehicles delivered. Instead, late deliveries of vehicles and looming high premiums on spot sales at the showrooms emerged as pressing concerns among buyers.

Meanwhile, assemblers have not come out with any price relief for the consumers in the last 10 months despite rupee recovery against the dollar from August 2020 till to date.

According to the data of Pakistan Automotive Manufacturers Association (PAMA), total car sales during 10MFY21 rose to 126,679 units from 85,330 units in the same period last fiscal year. However, due to limited factory and office hours from April 14 during Ramazan, total car sales in April plunged to 14,435 units from 17,105 units in March 2020. In April 2020, no auto production and sales were made due to countrywide lockdown as the Covid-19 pandemic found its way to Pakistan.

Honda Civic and City sales grew by 74pc to 20,869 units in 10MFY21. In April, Civic and City sales fell to 2,053 units versus 2,603 units in March. Despite no production in April, Suzuki Swift sales surged by 34pc to 2,077 units in 10MFY21. Only 181 units were sold in April as compared to 355 units in March.

In 10MFY21, Toyota Corolla sales stood at 14,979 units, showing a fall of 29pc. In April, Corolla sales were down to 1,724 units as compared to 2,126 units in March.

New comer Hyundai Elantra marked the sales in PAMA data with 326 units in March to April.

Suzuki Cultus and Suzuki WagonR sales swelled by 27pc and 68pc to 13,420 and 10,314 units, respectively, in 10MFY21. Cultus sales fell flat at 1,312 units in April from 1,637 units in March while WagonR sales increased to 1,447 units in April from 1,259 units in March.

Decades-old Suzuki Bolan sales posted 62pc growth to 7,245 units in 10MFY21. However, its sales suffered a fall to 747 units in April from 1,017 units in March.

A 19pc jump was registered in Suzuki Alto 660cc sales to 33,129 units in 10MFY21 while its sales dropped to 4,091 units in April from 4,745 units in March.

Truck, tractor sales up

Truck sales grew by 7.7pc in 10MFY21 to 2,982 units despite a 42pc drop in Hino sales to 579 units in the above period.

During the first 10MFY21, sales of Master, Isuzu and JAC trucks improved by 97pc, nine and 464pc to 722, 1,495 and 186 units, respectively.

Hino continued its negative trend in bus sales also which declined by 34pc to 166 units while Master bus sales showed a massive growth of 84pc to 304 units. With 95 units in 10MFY21, Isuzu sales remained 27pc lower than 10MFY20. With a mixed sales trend, total bus sales, however, depicted a 5.6pc rise in the first 10 months of the current fiscal year to 565 units.

Amid stiff competition with Kia Sportage, MG, Hyundai Tucson and other Chinese brands, locally assembled Toyota Fortuner managed to maintain its sales increase by a whopping 163pc to 2,813 units in 10MFY21. Fortuner’s April sales stood lower at 364 units from 508 units in March.

However, Hyundai Tucson with its assembly line period from August 2020 to April sold 3,262 units which is much more impressive than Toyota Fortuner sales.

With a 51pc jump, Honda BR-V sales reached 3,116 units in 10MFY21.

In pickups, barring 49pc fall in sales of Isuzu D-MAX to 226 units, other players enjoyed rising sales during 10MFY21 with 42pc in Suzuki Ravi to 8,434 units followed by 83pc in Toyota Hilux sales to 5,913 units and 61pc in JAC with sale of 547 units. New comer Hyundai Porter, which entered the Pakistani market from January 2020, sold 961 units in 10MFY21.

Massey Ferguson and Fiat tractors sales stood at 29,141 and 12,278 units in 10MFY21, up by 87pc and 26pc compared to the same period last fiscal, signalling positive agriculture indicators.

Rickshaw, bike in strong demand

Atlas Honda Ltd (AHL) sales of two-wheelers grew 39pc to 1.076 million units in 10MFY21 while Suzuki and Yamaha sold 19,973 and 18,375 units. United Auto Motorcycle sales grew by 30pc to 314,393 units while its three-wheelers sales rose by 23pc to 5,863 units in 10MFY21 as compared to the same period last fiscal year.

Qingqi and Sazgar three-wheeler sales went up by 47pc and 35pc to 15,803 and 12,811 units in 10MFY21.

Published in Dawn, May 18th, 2021

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