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July 12, 2019

Car sales slide 4.2pc to 207,630 units in FY2019

Business

July 12, 2019

KARACHI: Sales of passenger cars scaled back 4.22 percent to 207,630 units during the last fiscal year as soft rupee-driven price hikes weakened consumer buying power, analysts said on Thursday.

Pakistan Automotive Manufacturers Association (PAMA) data showed that passenger car sales stood at 216,786 units during the preceding fiscal year.

Mashood Ali Khan, former chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers said automotive manufacturers were compelled to increase the prices with depreciation of rupee and that resulted in decline in sales. The rupee has lost more than 50 percent of its value against the US dollar since December 2017.

In June, car sales remained at 14,767 units, down 4.28 percent month-on-month and decreasing 5.65 percent year-on-year.

Analysts said increase in the prices of almost all the models in June had a major impact on the auto sales. Besides, budgetary measures also restricted citizens from buying new cars. The budget for the fiscal year of 2019/20, envisaging federal excise duty on all engine size vehicles, would further increase prices, they added.

The government imposed federal excise duty (FED) of 2.5 percent on cars of 1000cc and below engine capacity, while there is 5 percent FED on vehicles between 1001 to 2000cc and 7.5 percent on vehicles above 2000cc.

All three car manufacturers: Indus Motors, Honda Atlas and Pak Suzuki increased prices of their vehicles following the Finance Bill 2019.

In FY2019, sales of cars of 1300cc and above engine capacity increased 1.83 percent to 100,959 units. Their sales stood at 99,138 units in FY2018. Sales of Toyota Corolla rose 10.32 percent to 56,720 units. Sales of Honda Civic and City were, however, down 9.23 percent to 39,189. Their sales were recorded at 42,810 a year earlier.

Suzuki Cultus and Suzuki WagonR – 1000cc cars – witnessed 11.44 percent increase in sales to 55,377 units during the last fiscal year.

Sales of 800cc dropped 24.52 percent to 51,294 units as Pak Suzuki discontinued Mehran and launched 660cc Alto in June. Alto’s sale was recorded at 1,685 last month.

PAMA data further showed that sales of trucks dropped to 5,828 in FY2019 from 9,331 units in FY2018. Sales of buses, however, increased to 935 units from 762 units.

Sales of light commercial vehicles, vans and jeeps declined 40.52 percent to 7,654 units in FY2019. The figure was 12,870 in FY2018. Toyota Fortuner’s sale dropped to 2,609 units from 4,186, while sales of Honda’s BR-V fell to 5,045 units from 8,684 units.

Sales of tractors decreased 28.9 percent to 50,405 units in FY2019. Total 70,887 tractors were sold during the last fiscal year.

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