Higher prices, interest rates drive down car sales in July

KARACHI: Car sales in the country fell 64 percent in July from a year earlier, as higher prices and interest rates deterred buyers, industry data showed on Friday.

With the exception of tractors, sales of all vehicles including passenger cars, trucks, jeeps, pick-ups and two-wheelers as well as three-wheelers dropped during this period.

According to data released by Pakistan Automotive Manufacturers Association (PAMA), passenger car sales (PAMA member cars) decreased by 64 percent to 3,702 units in July 2023 compared with 10,378 units sold during the same month last year.

Sunny Kumar, an analyst at Topline Securities, said escalating car prices, expensive auto financing, and the low purchasing power of consumers were among the primary reasons for the decline in sales.

During this period, sales of 1300cc and above cars were recorded at 1,694 units only, down 62 percent compared with sales of 4,464 units in the same period last year.

It included 208 units of Honda Civic and City, 249 units of Suzuki Swift, and 1,067 units of Toyota Corolla and Toyota Yaris, 80 units of Hyundai Elantra and 90 units of Sonata.

During this period, 1000cc cars recorded sales of 422 units only, which included 177 units of Suzuki Cultus and 245 units of Suzuki WagonR.

Below 1000cc vehicles recorded a sale of 1,586 units, including 146 units of Suzuki Bolan and 1,440 units of Suzuki Alto.

Buses and trucks saw a decrease to 195 units in July from 274 units in the same month last year. The sale of jeeps and pick-ups decreased to 1,390 units from 1,547 units sold during the same period last year.

However, sales of tractors increased to 2,678 units from 2,254 units in July last year.

The sale of rickshaws and motorbikes decreased to 73,588 units during July 2023 against 96,421 units in the same period last year.

Indus Motors (INDU) posted the highest decline of 26 percent MoM to 1,368 units in July 2023 led by a 65 percent MoM decline in sales of Fortuner and Hilux.

Pak Suzuki Motor Company (PSMC) recorded a decline of 19 percent MoM to 2,444 units in July 2023 ledby a decline in sales of Bolan (-44 percent MoM), and Alto (-25 percent MoM).

However, Honda Atlas Car (HCAR) recorded an increase of 61 percent MoM to 494 units in July 2023 mainly due to low base of last month.

Hyundai sales were also up 2 percent MoM, whereas Tuscon sales were up 5 percent MoM to 328 units in July. Amongst Tractors, Millat Tractors (MTL) recorded a decline of 22 percent MoM to 1,656 units in July 2023, while Al-Ghazi Tractors (AGTL) recorded sales of 1,022 units, up 20 percent MoM.

Sales of trucks and buses were up 31 percent MoM, and down 29 percent YoY to 195 units in the month under review. Pakistan’s bike sales were down 11 percent MoM and 24 percent YoY in July 2023. Atlas Honda (ATLH) recorded sales of 62,000 units, down 17 percent MoM and 23 percent YoY. Higher bike prices, and low purchasing power of consumers are the primary reasons for the decline in sales.