Car sales soar 118pc in February, outpacing 41pc fiscal year-to-date fall

KARACHI: The automotive sector experienced a sharp contrast in fortunes, with passenger car sales witnessing a sharp year-on-year increase in February 2024, even as sales for the fiscal year to date showed a significant decline, the latest data from the Pakistan Automotive Manufacturers Association (PAMA) showed on Tuesday.

Car sales saw a significant year-on-year increase of 118 percent to 7,953 vehicles in February 2024, up from 3,642 units in the same month last year. This surge, however, contrasts with a broader 41 percent drop in sales over the first eight months of the fiscal year, with only 46,417 units sold compared to 78,575 units during the same period in FY23.

February 2024 sales increased by 2 percent month-on-month compared with 7,802 units sold in January 2024. During February 2024, sales of 1300 cc and above cars were recorded at 3,941 units, up 39 percent compared with the same month of the previous year’s sales of 2,842 units.

In February 2024, 1,000 cc cars recorded sales of 456 units (320 units of Suzuki Cultus and 136 units of Suzuki WagonR) against 165 units in the same month last year. Below 1,000 cc vehicles recorded a sale of 3,556 units, higher by 4.6 times compared with 635 units last year. Suzuki Alto sales surged to 3,373 units on a year-on-year basis in February 2024, compared with 544 units.

Buses and trucks saw a decrease to 353 units in the period under discussion from 657 units in the same month last year. The sale of jeeps and pick-ups decreased to 1,756 units from 2,544 units sold during the same period last year. Sales of tractors slightly rose to 3,366 units from 3,330 units in February 2023.

The sale of rickshaws and motorbikes decreased to 93,764 units in February compared with 103,003 units in the same period last year. Auto expert and former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), Mashood Ali Khan, said that except for tractors, sales of other vehicles decreased, including those of buses and trucks. “This industry is not going to work unless drastic changes are made in the policy,” he said. “The industry is not working, so buses and truck sales remained low.”

Khan said that an increase in the sales tax on cars by the caretaker government was also hurting the sales of cars. "The auto industry’s results are not good. Prices are very high." He said that there was a need for an industry policy, as the industry has been ignored, which would not be beneficial for the country. “We need to cut down on car prices to increase sales and make a win-win position for the customers, as a common person is not in the position to buy a car because of high inflation,” he said.

According to brokerage Topline Securities, car sales, including non-PAMA members’ car sales, clocked in at around 10,900, down 7 percent month-on-month while up 52 percent year-on-year in February 2024.

Indus Motors sales were down 26 percent month-on-month to 2,036 units in February, primarily due to the high base effect of last month and the launch of the new Corolla Cross. Topline Securities reported that escalating car prices, expensive auto financing, and the low purchasing power of consumers contribute to the decline in sales.