KARACHI: Auto sales, including those reported by companies that aren’t members of the Pakistan Automotive Manufacturers Association, declined in September by seven per cent on a month-on-month basis to about 13,000 units.
According to data compiled by Topline Securities, auto sales dropped 51pc on an annual basis amid escalating prices, expensive auto financing and low purchasing power of consumers. The latest numbers take the first-quarter sales to 34,472 units, down 50pc from a year ago.
Speaking to Dawn, Arif Habib Ltd Head of Research Tahir Abbas said the key reason for the sharp decline in car sales is the restrictions imposed by the State Bank of Pakistan on the imports of completely knocked-down (CKD) kits, which are loose parts necessary to assemble a vehicle locally.
The move by the central bank is meant to control the outflow of dollars from the economy in view of the continuous drawdown on locally available foreign exchange.
“CKDs are being imported on the quota basis, which has dented auto production as well as sales,” he said.
The nationwide floods have also dampened auto demand in the rural areas, he said. No wonder the sales of tractors totalled only 2,149 units in September, down 51pc and 46pc on annual and monthly bases, respectively.
“The overall economic situation isn’t conducive for auto purchases as unusually high inflation has affected the purchasing power of potential car buyers,” Mr Abbas added.
Data showed all auto companies reported declines in sales on a monthly basis with the sole exception of Pak Suzuki Motor Company Ltd. Its sales went up 52pc owing to the low-base effect. A plant closure amid the unavailability of CKD kits limited its sales in August to 3,954 units versus 6,006 units in September, said Topline Securities.
Indus Motor Company Ltd recorded a 32pc monthly decline in sales to 2,617 units while Honda Atlas Car Ltd registered a drop of 29pc to 1,280 units over the same period. Sales of Hyundai Nishat Motor Ltd also posted a 50pc monthly drop in sales to 967 units in September, which was led by a 62pc fall in Tucson sales.
In the tractor segment, Millat Tractors Ltd recorded a decline of 75pc and 72pc on monthly and annual bases, respectively, to 638 units.
The reason for the major fall in sales was that its plant remained shut for 23 days in September because of the floods, said the brokerage.
Al Ghazi Tractors Ltd recorded sales of 1,511 units, up 6pc from the preceding month but down 29pc on a year-on-year basis.
Bike sales were down 7pc and 39pc on monthly and annual bases, respectively. Atlas Honda Ltd sold 85,042 units in September, almost unchanged from August but down 23pc from a year ago.
A drop in transportation activities amid the nationwide floods and a slowdown in the overall economy, sales of trucks and buses went down 25pc year-on-year to 378 units in September. Their numbers were up 11pc on a monthly basis, however.
Published in Dawn, October 13th, 2022