KARACHI, Feb 18: Sales of locally assembled cars surged by 25 per cent to 82,469 units during the last seven months (July-January) of the fiscal year 2005-06 as against 65,803 units in the same period last year. In January 2006, the sales showed a 30 per cent growth to 11,442 units as compared to 8,793 units in the same month last year.

Assemblers expect car sales to cross 150,000 units by the end of current fiscal year on the back of rising demand triggered by car financing by banks.

Indus Motors sold 22,672 cars during July-January 2005-06 compared to 19,316 units, showing a jump of 17 per cent, while Pak Suzuki posted a 27 per cent rise in its sales, touching to 49,403 units from 39,004 units. Honda Atlas sales grew by 49 per cent to 16,912 units from 11,340 units, while Dewan Farooque Motors’s sales surged by only one per cent to 7,976 units in the last seven months from 7,892 units.

The demand for locally assembled cars is expected to remain buoyant in 2006 as some banks have come up with more attractive packages for car financing. One of the banks now offers a scheme to consumers to change their old car with new car.

The import of used cars already touched over 8,500 units in the last seven months under various schemes announced in the 2005-06 budget and trade policy and importers anticipate flooding 30,000 cars this year.

Local assemblers, particularly 800-1,000cc car makers, might have been worried over the rising imports that may result in eroding their market share in future. But so far the sales of both imported cars and locally assembled cars are high which shows the improved liquidity position of certain class and their changing lifestyle irrespective of the increase in oil prices and rising inflation in the country.

Besides, some used car dealers have also started offering cars on instalment, especially smaller engine capacity, which may attract the buyers of locally assembled cars.

However, the rate of premiums has somewhat subsided owing to arrivals of used cars at competitive rates. The local industry claims that the delivery period has decreased to two months because of improved supplies of cars from the plant. But buyers contradict the claim and say that they are still waiting for three to six months for getting delivery of cars.

According to an analyst, theoretically, the upward movement in interest rates was expected to have a negative impact on the car demand in terms of rising financing cost. But this has not happened and demand is still strong.