KARACHI: Car sales soared by 211 percent year-on-year in April, with sales also rising on a month-on-month basis as demand rebounded following signs of economic recovery, Pakistan Automotive Manufacturers Association (PAMA) data showed on Monday.
However, sales for the first 10 months of the current fiscal year (10MFY24) remained low.PAMA data showed passenger car sales increased to 8,873 units against 2,844 units in April 2023. In the 10 months of FY23, a total of 62,962 units were sold, down 29 percent from 88,620 units sold during the same period of FY23.
On a month-on-month basis, April 2024 sales remained higher by 16 percent at 8,873 units compared with the 7,672 units sold in March 2024.Analysts said that last year, there was a low base of sales due to plant shutdowns, which resulted in a huge percentage of sales this year.
During this period, sales of 1300cc and above cars were recorded at 3,212 units, up 103 percent compared with the same month of the previous year’s sales of 1,585 units.In April 2024, 1,000 cc cars recorded sales of 638 units, (comprising 320 units of Suzuki Cultus and 318 units of Suzuki WagonR) against 276 units in the same month last year.
Below 1,000 cc vehicles recorded sales of 5,023 units, higher by 411 percent compared with 983 units last year.Buses and trucks saw an increase to 229 units in April 2024, up from 152 units in the same month last year.The sale of jeeps and pick-ups slightly increased to 1,642 units from 1,639 units sold during the same period last year.
Mashood Ali Khan, former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), said that the situation of trucks and buses was not encouraging.
Their volume had decreased in 10MFY24 and auto parts manufacturers associated with them were also affected heavily. “Their survival is difficult,” he said.Sales of tractors dropped to 3,083 units from 3,211 units in April 2023. Khan said that the tractor industry was performing better. The car industry was in crisis last year.
“I don’t think that the car industry would be able to reach the 100k units this year,” Khan said. “Until car financing interest rates reach a single digit, car financing will not increase.”He said that a rate cut in interest, an increase in localization, and a decrease in taxes would help out the industry; otherwise, it would continue facing challenges.
Rickshaws and bike sales were up 15 percent month-on-month and 31 percent year-on-year to 107,590 units in Apr-2024. Atlas Honda (ATLH) recorded sales of 95,000 units, up 19 percent month-on-month and 29 percent year-on-year. This takes total industry sales to 941,000 units, down 6 percent in 10MFY24 due to higher bike prices and low purchasing power of consumers.
Brokerage Topline Securities in a report said that the month-on-month jump in car sales is primarily due to an increase in the sales of Pak Suzuki (PSMC), where PSMC’s Alto variant recorded a 64 percent month-on-month increase to 4,786 units in April, the highest sales recorded after 15 months.
On a year-on-year basis, the significant jump in total car sales is attributed to a low base from last year amid plant shutdowns.Similarly, Indus Motors (INDU’s) sales were up by 21 percent month-on-month to 2,065 units, and Hyundai Nishat Motor saw an 18 percent month-on-month increase to 686 units in Apr-2024.
However, only Honda Atlas Cars (HCAR) recorded a fall of 54 percent month-on-month to 1,003 units in April. On a year-on-year basis, HCAR recorded significant growth of 385 percent year-on-year due to the low base effect, as the company shut down its plant during the same period last year.
Sazgar Engineering (SAZEW’s) Havel variant recorded sales of 544 units, up 8 percent month-on-month and 8.9x year-on-year in April.However, the decline in 10MFY24 is primarily due to escalating car prices, expensive auto financing, and the low purchasing power of consumers contributing to the decline in year-on-year sales, said the report.
“We believe that improvement in economic activity following the IMF's new program, a stable currency, and reduction in interest rates will lead to a further improvement in car sales,” the brokerage said.
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