KARACHI, July 15: The fiscal 2002-03 concluded with a promising note for the entire auto sector, marked by rising sales of cars by 46 per cent followed by 56 per cent in trucks, buses by 25 per cent, light commercial vehicles (LCVs) by 37 per cent, tractors by 12 per cent and two wheelers by 35 per cent.

Similarly, production of cars in the outgoing fiscal year rose by 53 per cent followed by 70 per cent in trucks, 19 per cent in buses, 38.5 per cent in LCVs, 10 per cent in tractors and 35 per cent in motorcycles.

The overall positive economic indicators in 2002-03 can be attributed to the robust performance given by the entire auto sector. Besides, production of cotton, wheat, rice and sugar (cash crops) also remained high in the outgoing fiscal, thus playing a major role in pushing up sales of vehicles.

A total of 62,073 cars, including Toyota, Honda, Suzuki, Hyundai Santro, Kia Spectra and Daihatsu Cuore were rolled out in 2002-03 as compared to 40,601 units in the last fiscal. Similarly, sales of these cars touched 61,955 units from 42,341 units.

Car segments have been particularly remained in the limelight due to buyers, investors and many big companies enthusiasms towards buying of new cars on account of record low auto financing rates offered by a host of banks and leasing companies coupled with arrival of over $3.8 billion home remittance from abroad, introduction of new models and huge presence of investors. As a result, car makers had to surge production to meet the rising demand.

The issue of premiums being charged on new models by authorized dealers remained intact in the last one year. However, the rate of premiums had come down. The government had virtually failed to eliminate the menace of black marketing in new cars.

However, as a formality, Pak Suzuki and Honda Atlas cut prices by Rs2,000-3,000 and Rs12,000-17,000 on various models.

Production and Industries Minister Liaquat Ali Khan’s effort to pressurise the assemblers to cut prices has already been viewed by auto analysts as a formal exercise as prices are not usually reduced when demand outstripped supplies and the commodity was selling as hot cakes.

With huge sales auto companies’ share prices had witnessed tremendous growth. Pak Suzuki share was trading in June 2003 at Rs99 as compared to Rs24.85 in June 2002, while share price of Indus Motors surged to Rs72.25 from Rs18 followed by increase in share price of Honda Atlas to Rs67.50 from Rs27.55 in the last one year.

Market analysts believe the growth in car demand may persist in the first six months of the new fiscal year in view of current booking trends of new cars coupled with investors’ presence and arrival of home remittances. Pakistanis living in the US and the UAE are investing huge money in real estate, new cars and stock markets to shield their investment as well as to get ample returns.

The boom in production and sales in the year 2002-03 has been a record for the local car industry dominated by the Japanese assemblers. In 1995-96, car production stood at 31,079 units, rising to 33,741 units in 1996-97. Production of cars in 1997-98, which was 33,684 units, jumped to 38,682 units in 1998-99, but again fell to 32,451 in 1999-2000. Rolling out of cars started showing improvement in 2000-01 when production reached 39,575 units owing to some improvement in economic indicators, gradual rise in arrival of home remittances, lowering of interest rates and entry of banks and leasing companies in car financing.

Ahead of the deadline of 2005 to open markets under WTO agreement — auto sector has already been witnessing many changes in shape of arrival of foreign cars. Chevrolet 800cc cars from Korea has already hit the market despite no cut in import duty on small cars in the budget 2003-04. Market is already abuzz with news of arrival of Chinese 600-800cc cars in future.

The Pakistan Automotive Manufacturers Association (PAMA) figures reveal that a total of 12,867 Corolla were sold out as compared to 6,151 units in the last fiscal. Sales of Suzuki Mehran peaked to 16,582 from 9,964 units, followed by Cultus to 7,927 from 5,637 units. Alto 1000cc sales rose to 4,701 units from 3,072 units, while sales of Honda Civic increased to 4,637 from 4,625 units. Honda City sales jacked up to 3,749 from 3,382 units. Santro sales touched to 3,135 from 2,245 units, while Suzuki Baleno sales were 2,588 as compared to 1,188 units.

BIKES: Production and sales stood at 165,105 and 161,863 units, respectively, in 2002-03 as compared to 120,627 and 120,083 units in the corresponding period of 2001-02. Two Chinese units became member of the PAMA, which is usually dominated by Japanese bike assemblers like Honda, Yamaha and Suzuki. Local industry has already been facing stiff competition from seven Chinese bike assemblers.

Motorcycle market has seen a phenomenal change in the last one-and-a-half years following entry of Chinese bike makers, thus giving consumers a wider choice to own two wheelers at prices ranging between Rs37,000 and Rs42,000 as compared to Japanese bikes at Rs58,000-73,000.

BUS/TRUCKS: Production and sales of trucks (Hino, Nissan and Mazda) jumped to 1,929 and 1,883 units, respectively, from 1,134 and 1,208 units, while production and sales of buses stood at 1,296 and 1,332 units as compared to 1,086 and 1,065 units.

An assembler linked the rise in bus production to rising sales of buses under urban transport scheme in Punjab. Bus sales may increase in coming months as Sindh has also introduced the transport scheme. In truck segments, increase in exports and imports followed by rise in large scale manufacturing helped in pushing up cargo movements in the country, thus encouraging many players to buy trucks.

Sindh Engineering, maker of Mazda trucks, has entered into an agreement with leading Chinese truck assembler, Dong Feng, to introduce Chinese trucks by replacing Mazda this month.

Due to some corporate compulsion the Mazda Motor Corporation, Japan, has expressed its inability to supply T-3500 chassis in middle of the current calender year. Under a franchise agreement, the Chinese company will assemble vehicles of 1.5 tons, 3.9 tons and 15 tons pay load commercial vehicles fitted with world famous Cummins engine.

A 1.5-ton capacity 2600cc Chinese truck — Zabardast — had already been launched in March last year by Adam Motor Company, a sister concern of Omar Jibran Engineering Industries Limited, in collaboration with Jiangsu Mudan Automobile Group Company of China.

In the current year, Master Motor Corporation, a subsidiary of Master Group of Industries, will introduce medium loaded trucks and luxury buses in collaboration with China.

LCVs: Production and sales of LCVs (Potohar, Bolan, Ravi, Hilux and Shehzore) increased to 12,548 and 12,383 units, respectively, from 9,055 and 9,033 units in 2001-02.

TRACTORS: Production and sales of tractors (Al-Ghazi Fiat and Millat MF) increased to 26,240 and 26,832 units, respectively, in 2002-03 from 23,801 and 24,001 units in 2001-02.