Modest uptick in car sales for March amidst 37pc year-to-date plunge

KARACHI: The car sales rose marginally in March compared to last year, registering 7,672 units, a 6.5 percent increase from 7,201 units sold in March 2023, Pakistan Automotive Manufacturers Association (PAMA) data showed on Wednesday.

However, the year-to-date picture remains grim, with car sales for the first nine months of FY24 (July-March) plummeting 37 percent to 54,089 units, down sharply from 85,776 units sold in the same period of FY23.

March 2024 sales remained lower by 3.5 percent month-on-month compared with the 7,953 units sold in February 2024.

Mashood Ali Khan, an auto expert and former chairman PAAPAM, said that except for tractors and motorcycles, the numbers were not much encouraging. “Only tractor sales increased during March, it produced the value. The motorcycle industry is a bit better too if we look at volumes.”

Khan said that the car industry is in trouble. Our volume, compared with last year, would be difficult to meet. “The volume would likely remain below 100,00.”

He said that the major reason behind the decline in sales was high prices along with unsustainable policies. “People are compromising on cars and buying low-price cars. Those who could afford sedan earlier, are now buying hatchbacks,” he suggested.Khan suggested that used car imports should be banned while unrealistic taxes should be removed.

He said that SMEs were being closed, then it would be turn of the medium-level industry and then the large industry at the third level. “The industry should be taken on board in the policy-making. Otherwise, the situation would further deteriorate,” he warned.

During March’24, sales of 1300 cc and above cars were recorded at 3,844 units, up 32 percent compared with the same month of the previous year’s sales of 2,913 units.In March 2024, 1,000 cc cars recorded sales of 669 units only, (302 units of Suzuki Cultus and 367 units of Suzuki WagonR) against 964 units in the same month last year.

Below 1,000 cc vehicles recorded a sale of 3,159 units, lower by 5 percent against 3,324 units last year. Suzuki Alto sold 2,922 units in March 2024, compared with 2,542 units in March 2023.Buses and trucks saw an increase to 311 units in March 2024 from 308 units in the same month the previous year.

The volume of trucks and buses has decreased drastically, which is also a challenge for the local auto parts industry. Survival at this level is very difficult. The government should review the policy for the import of electric vehicles and look at the existing plants while the import of buses would affect the existing industry badly. “Instead of importing buses, those manufacturers should be invited to put their plants here in the country, especially electric vehicle buses. It can not only be used here but could also be exported,” Khan suggested.

The sale of jeeps and pick-ups decreased to 1,707 units from 2,271 units sold during the same period last year. Sales of tractors increased to 4,608 units from 2,984 units in March 2023.

The sale of rickshaws and motorbikes also increased to 93,016 units in March’24 against 84,307 units in the same period last year.According to Sunny Kumar, an analyst at Topline Securities, including Non-PAMA members car sales clocked in at 10.5K down 3 percent month-on-month while up one percent year-on-year in Mar-2024.

Honda Atlas Cars (HCAR) recorded strong growth of 44 percent month-on-month and 162 percent year-on-year to 2,188 units in Mar-2024 due to the low base effect as the company shut down its plant during the same period last year.

However, Pak Suzuki (PSMC) and Indus Motors (INDU) both recorded 16 percent month-on-month fall in car sales in Mar-2024. Hyundai Nishat Motor recorded sales of 582 units, down 30 percent year-on-year while up 3 percent MoM.

“Going forward, we believe that improvement in economic activity following the IMF's new program, a stable currency, and reductions in interest rates will lead to an improvement in car sales,” he said.