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Car sales grow 18pc to 13,882 in September

Business

October 13, 2020

KARACHI: Car sales grew 18 percent year-on-year to 13,882 units in September as low interest rates and revival of economic activity after monthslong lockdown helped automobile sector to recover some losses, industry data showed on Monday.

Pakistan Automotive Manufacturers Association data showed that car sales stood at 11,724 in the corresponding month a year earlier. The government lifted lockdown in August with almost all the industries allowed to open after five months amid coronavirus outbreak. While the infection is still spreading, the government has decided to opt for targeted shutdown, called smart lockdown, to support economic growth that contracted in the last fiscal year of 2019/20.

Analysts said the return of normalcy, together with low interest rates, are encouraging car sales. ‚ÄúWe expect demand for cars to grow stronger owing to lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19,‚ÄĚ Topline Research said in a report.

The State Bank of Pakistan reduced the benchmark interest rates by cumulative 625 basis points to 7 percent from 13.25 percent in a brief period of four months to buoy the sagging economy.

In September, Indus Motor and Honda Car registered sales increase of 106 percent and 87 percent year-on-year, respectively. However, Pak Suzuki Motor Company sales decreased 20 percent due to drop in Alto’s sales by 37 percent. Last year, Alto saw high numbers due to its recent launch.

Car sales increased 19 percent month-on-month in September. The increase was driven by Indus Motor increase of 32 percent. Toyota Yaris sales picked up 42 percent. Honda Car sales also improved 20 percent as BRV sales increased 50 percent in September over August.

New entrants into auto space continue to perform well with Hyundai Nishat selling 316 units, 187 percent in September over August, while Kia Lucky Motors sold around 1,500 units, according to Topline Research. Kia Lucky Motor is also planning to turn to double-shift production from January next year to meet growing demand from customers.

Last month, Hyundai Nishat launched sports utility vehicle Tucson. A strong market response is visible as number of units jumped to 215 in September from 22 last month. Atlas Honda recorded motorbike sales of 109,002 units in September, up 45 percent year-on-year.

Tractor sales were up 12 percent year-on-year and 49 percent month-on-month. Millat Tractors sales increased 69 percent, while Al Ghazi Tractors sales decreased 31 percent in September over the same month a year earlier. In July-September, car sales rose 8 percent to 37,017 units.