Car sales rise 5pc m/m, but fall 65pc y/y in November

KARACHI The car sales rose 5 percent in November from a month earlier, but plunged 65 percent from a year ago, as high prices and low affordability weighed on demand for new passenger vehicles, data from the Pakistan Automotive Manufacturers Association (PAMA) showed on Monday.

The industry sold 6,500 units in November, up from 6,200 in October, but down from 18,600 in November 2022, according to PAMA. The cumulative sales for the first five months of the fiscal year 2023/24 stood at 33,600 units, a 50 percent drop from 67,100 units in the same period last year.

Including non-PAMA members, car sales were around 7,700 units, up 6 percent month-on-month and down 60 percent year-on-year. Analysts said the monthly increase was due to a low base effect, as sales in October were affected by public holidays and supply chain disruptions.

However, they said the annual fall reflected the impact of multiple factors, such as a decline in consumer purchasing power, a surge in inflation, a depreciation of the rupee, and higher interest rates. "Despite attempts to stimulate sales through price cuts announced in October 2023, recovery remained elusive," brokerage Arif Habib said in a market note.

The data showed that the industry's performance was uneven across different segments and players, with some showing signs of resilience and others struggling to cope. Indus Motors, the maker of Toyota cars, reported a 9 percent monthly decline in sales, selling 956 units in November, down from 1,050 in October. Both its Corolla and Yaris models saw a 13 percent drop in sales.

Pak Suzuki Motor, the largest carmaker by market share, also saw an 8 percent monthly decline in sales, selling 3,400 units in November, down from 3,700 in October. Its Alto model, which accounts for more than half of its sales, saw a 10 percent drop in sales.

However, Honda Atlas Cars, the maker of Honda cars, bucked the trend and posted a 121 percent monthly increase in sales, selling 1,300 units in November, up from 590 in October. Its Civic and City models saw a 141 percent surge in sales, indicating a strong demand for its premium segment.

Hyundai Nishat Motor, a joint venture between South Korea's Hyundai Motor Company and Pakistan's Nishat Group, recorded sales of 532 units in November, up 21 percent year-on-year and 41 percent month-on-month. The primary reason for this better performance was the sale of its commercial pickup truck, Hyundai Porter, which sold 304 units in November, up 76 percent from October.

The two-wheeler segment also faced challenges, with bike sales volumes witnessing a 13 percent monthly and 21 percent annual decline at 386,000 units in November. Atlas Honda, the largest bike maker, reported a 16 percent monthly and 18 percent annual drop in sales, selling 76,000 units in November. This takes the total industry sales to 459,000 units in 5MFY24, down 12% year-on-year, due to higher bike prices and low purchasing power of consumers. Among tractors, Al Ghazi Tractors recorded a decline of 68 percent month-on-month to 701 units in November, followed by Millat Tractors, which recorded a 6 percent month-on-month sales decrease to 2,809 units. This takes the total tractor industry sales in 5MFY24 to 20,806 units, up 98 percent year-on-year, due to the low base of last year amid floods.

Trucks and buses sales were down 20 percent month-on-month and 57 percent year-on-year to 147 units in November. This takes the 5MFY24 industry sales to 877 units, down 47 percent year-on-year, reflecting the slowdown in the construction and transport sectors.