Passenger car sales up 58pc in July, down 42pc MoM

KARACHI: Passenger car sales (PAMA members) in the country increased by 58 per cent in July 2024 compared year-on-year while it remained lower by 42 per cent to 10,128 units in June 2024.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales (PAMA member cars) increased by 58 per cent to 5,857 units in July 2024 compared with 3,702 units sold during the same month last year.

Mashood Ali Khan, an auto expert and former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) said there were higher challenges ahead in the industry. “One positive point is a decline in interest, which would reflect at the end of this year or early next year,” he said.

He said the impact of taxes on agriculture is visible and tractor sales fell while car prices are not affordable for customers because of an increase in taxes for the salaried class and other citizens. Growth in the parallel industries will benefit the auto industry.

He said that the cost of production was higher, which would make volume increase difficult in the coming months. During this period, sales of 1300cc and above cars were recorded at 2,465 units, up 46 per cent compared with the same period last year’s sales of 1,694 units.

During July 2024, 1,000cc cars recorded the sales of 235 units against the 422 units sold during the same period last year. Below 1,000cc vehicles recorded the sale of 3,157 units against 1,586 units sold during July 23.

The sale of jeeps and pick-ups increased to 2,732 units from 1,389 units sold during the same period last year. However, sales of tractors decreased to 1,460 units from 2,678 units in July last year.

According to Myesha Sohail at Topline Securities, the MoM decline in car sales can be primarily attributed to the increase in tax rates for vehicles (ie WHT) introduced in the FY25 budget. This led to pre-buying in June 2024 and as a result the June 2024 number clocked in at an 18-month high.

Hyundai Nishat Motor experienced the most significant MoM drop, with the sales of 529 units -- down 50 per cent MoM and 7.0 per cent YoY.Indus Motor Company recorded the sales of 1,664 units in July 2024, reflecting a 44 per cent decline MoM. Honda Atlas Cars reported the sales of 931 units, down 15 per cent MoM, while Sazgar Engineering saw a smaller decrease, with 825 units sold, marking a 5.0 per cent MoM decline.

The YoY increase in car sales during July 2024 is attributed to the low base effect of the industry due to the closure of plants in 2023 due to a shortage of inventory. In the motorcycle segment, Pakistan’s two- and three-wheelers sales decreased by 5.0 per cent MoM, while increased by 15 per cent on YoY basis, totalling 84,993 units in July 2024. Atlas Honda recorded sales of 70,300 units, reflecting a 12 per cent MoM decline but a 13 per cent YoY increase.

In the tractor segment, Millat Tractors saw the sales of 605 units, down 63 per cent YoY and 78 per cent MoM. Al-Ghazi Tractors recorded the sales of 855 units, down 16 per cent YoY and 40 per cent MoM in July 2024. This brings total tractor industry sales to 1,460 units, a decrease of 45 per cent YoY and 65 per cent MoM.

The sharp fall in sales of tractors is also attributed to pre-buying in June 2024 as the government imposed the GST of 10 per cent on tractor sales. Truck and bus sales were up 3.0 per cent MoM and 57 per cent YoY, reaching 307 units in July 2024.