KARACHI: Car sales rose 8.3 percent year-on-year in August, the first annual growth after 16 months, as lower interest rates are encouraging auto financing, analysts said on Thursday.
Passenger car sales increased to 9,885 units in August from 9,126 units sold during the same month last year. However, car sales were lower by 2.3 percent in August over July, according to the Pakistan Automotive Manufacturers Association. Sales of jeeps, tractors, three-wheelers and motorcycles also increased year-on-year.
Last time car sales were seen increasing year-on-year in March 2019.
The central bank slashed interest rates to 7 percent from 13.25 percent within a little over three months. The rate cut is reviving auto financing, analysts said.
“We expect demand for cars to grow stronger as lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19 has revived demand for new cars,” said Hammad Akram, analyst at Topline Securities.
In August, 1300cc and above car sales showed an increase of 58.4 percent to 4,748 units compared with 2,997 units sold during the same month in the previous year. The main reason for the sales increase was the sale of 1,705 Toyota Yaris during this period.
Sales of Toyota Corolla decreased 50 percent to 867 units as against 1,727 units sold a year earlier, while sales of Honda Civic and City were up 79 percent to 1,980 from 1,106 units. Suzuki Swift also saw an increase to 196 cars from 164 cars.
In August, Suzuki Cultus and Suzuki WagonR under the 1000cc category witnessed an increase in sales by 10.3 percent to 2,133 as against 1,934 units last year.
Under 800cc, sales dropped 28.4 percent to 3,004 units in August as against 4,195 units during the corresponding period last year. Suzuki’s new Alto saw a decline of 30.5 percent in sales to 2,389 units from 3,435 units sold during the same month last year.
Buses and trucks saw a minor increase in sales to 284 units in August from 281 units. Sale of jeeps increased 42 percent to 421 units from 296 units. Pick-up sales rose to 1,436 units from 800 units.
Tractor sales increased 12 percent to 2,844 units in August from 2,545 units during the corresponding period last year. Rickshaws and motor bikes’ sales rose 9.3 percent to 140,325 units in August from 128,419 units.
Kia Lucky Motors continued to perform well and is also planning to shift its production to double shift from January next year to meet high customer demand, according to Topline Research. Another new entrant Hyundai Nishat launched Tucson in the sports utility vehicle category during August and sold 22 units along with 88 units of commercial pickup Porter H-100.