Car sales plunge 52pc in August, but recover from July low

KARACHI: Passenger car sales fell 52 percent in August from a year earlier, data showed on Monday, as high prices, expensive financing and low consumer demand weighed on the auto sector.

However, sales rose 60 percent from July, as some automakers resolved issues with importing parts and components amid easing of import restrictions. With the exception of Suzuki Alto and farm tractors, sales of all vehicles including trucks and buses, jeeps, pick-ups and two-wheelers as well as three-wheelers dropped during this period.

According to data released by Pakistan Automotive Manufacturers Association, passenger car sales (PAMA member cars) decreased by 52 percent to 5,909 units in August 23 compared with 8,980 units sold during the same month last year.

For the cumulative two months of FY24, passenger car sales dropped by 50 percent to 9,611 units against 19,358 units last year. However, August sales remained higher by 60 percent month on month against 3,702 units of July 2023.

During this period, sales of 1300cc and above cars sales were recorded at 2,310 units, down 59 percent compared with last year’s sales of 5,684 units. During this period, 1000cc cars recorded sales of 664 units against 776 units during the same month last year.

Below 1000cc vehicles recorded a sale of 2,935 units, up 16 percent against 2,520 units of last year. The main reason for the increase was an increase in the sales of Suzuki Alto. Sale of buses and trucks decreased to 167 units in August 2023 from 341 units in August 22.

The sale of jeeps and pick-ups decreased to 1,670 units from 2,809 units sold during the same period last year. Sales of tractors slightly rose to 3,967 units from 2,965 units during July last year.

The sale of rickshaws and motorbikes decreased to 88,318 units during August 23 against 102,403 units in the same period last year.

Analyst Sunny Kumar at Topline Securities said Pakistan car sales (as reported by PAMA) clocked in at 7.6K units, up 49 percent MoM. Total car sales, including non-PAMA members, clocked in at around 9K, up 46 percent MoM.

The significant MoM jump in car sales is due to the easing of CKD import issues, he said. “However, escalating car prices, expensive auto financing, and the low purchasing power of consumers are among the primary reasons for thedecline in YoY sales.” Pak Suzuki (PSMC) posted the highest increase of 75 percent MoM to 4,268 units in August 2023, led by an increase in sales of Alto (+92 percent MoM), Swift (+103 percent MoM), and Cultus (+72 percent MoM).

Hyundai sales were also up 37 percent MoM, whereas Tuscon sales were up 42 percent MoM to 465 units in August 2023. Honda Atlas Car (HCAR) recorded an increase of 36 percent MoM to 674 units in August 2023.

Indus Motors (INDU) sales went up 13 percent MoM, led by an increase in sales of Fortuner and Hilux by 43 percent MoM. Amongst tractors, Al Ghazi Tractors (AGTL), and Millat Tractors (MTL) recorded increases of 52 percent MoM and 46 percent MoM respectively in the month of August. This took total tractor industry sales to 6,645 units in 2MFY24, up 27 percent YoY.