Friday September 29, 2023

Car sales plummet by 85 percent to 2,844 units in April

May 12, 2023

KARACHI: Passenger car sales (PAMA members) plunged by 85 percent year-on-year in April 2023 amid non-production days, long Eid holidays, and a decline in purchasing power.

According to data released by Pakistan Automotive Manufacturers Association (PAMA), passenger car sales fell to 2,844 units only against 18,626 units in April 2022. In the first ten months of FY23, a total of 88,620 units were sold, down 54 percent against 191.238 units sold during the same period in FY22.

The decrease in sales could be attributed to a decline in demand mainly on the back of massive hikes in interest rates, spiralling automobile prices, repeated plant shutdowns, escalating petroleum prices, and reduced consumer affordability, Arif Habib Research stated in a report.

On month-on-month bases, April 2023 sales remained lower by 60.5 percent compared with the 7,201 units sold in March 2023. During this period, sales of 1300cc and above cars were recorded at 1,585 units, down 83 percent compared with the same month of the previous year’s sales of 9,189 units.

In April, 1,000cc cars recorded sales of 276 units only, (177 units of Suzuki Cultus and 99 units of Suzuki WagonR) against 3,568 units in the same month last year.

Below 1,000cc vehicles recorded a sale of 983 units, lower by 83 percent against 5,869 units last year. Suzuki’s new Alto sold 820 units in April 2023, compared with 5,009 units in April 2022.

Buses and trucks saw a decrease to 152 units in April 2023 from 472 units in the same month last year. The sale of jeeps and pick-ups decreased to 1,619 units from 3,917 units sold during the same period last year.

Sales of tractors dropped to 3,211 units from 4,848 units in April 2022. However, it remained month-on-month higher than 2,984 units sold in March 2023. The sale of rickshaws and motorbikes also decreased to 82,136 units in April 23 against 151,705 units in the same period last year.

Sunny Kumar, analyst at Topline Securities, said the auto sales were the lowest monthly sales since May-2020 in Covid lockdown. Including Non-PAMA members car sales clocked down 47 percent MoM.

Kumar said the MoM decline was primarily due to a seasonal slowdown in the month of Ramadan, lower working days amid the Eid holidays, and the non-availability of CKD parts on letter of credit issues.

The 10MFY23 sales were down primarily attributable to the non-availability of CKDs, escalating car prices, expensive auto financing, and the low purchasing power of consumers.

Honda Atlas Car (HCAR) recorded the highest decline of 75 percent MoM to 207 units in Apr-2023 led by a decline in sales of City and Civic by 74 percent MoM. Similarly, Pak Suzuki also posted a decline of 74 percent MoM to 1,474 units primarily due to the reasons mentioned above.

Further, auto financing declined consecutively for nine months with Mar’23 figure down by 12.83 percent YoY, to record Rs317 billion. “It is worth noting that auto financing used to contribute significantly, accounting for 30 percent to 40 percent of total auto sales, but it has now dropped to zero,” said Arif Habib Research.