Car sales accelerate 57pc to 151,182 units in FY2021

KARACHI: Car sales increased 57 percent to 151,182 units during the last fiscal year of 2020/21, the industry’s data showed on Tuesday, with the growth mainly attributed to muted demand in the previous Covid-addled year.

Pakistan Automotive Manufacturers Association’s (PAMA) data showed that car sales of its member companies stood at 96,455 units during the fiscal year of 2019/20.

Auto analyst Umair Naseer at Topline Securities attributed the growth to low base effect due to COVID-19 linked lockdowns in FY20 when total car sales were 28 percent lower than the highest sales of around 329,000 units recorded in FY2018.

In June, 11,569 cars were sold compared with 7,325 units in the same month a year earlier. However, monthly sales remained below 12,934 units sold in May.

“We expect car sales to touch 300,000 units in FY22 driven by low interest rates, launch of new models and reduction in car prices through lower taxes,” said Naseer.

The key idea behind offering the incentives is to increase cars affordability specially of the smaller segment cars, improve share of energy efficient and environment-friendly electric and hybrid cars and enhance the overall market size by increasing car manufacturing to 500,000 units by FY2026.

Notable features of the measures introduced in the budget include abolishment of 2.5 percent federal excise duty along with reduction in sales tax from 17 percent to 12.5 percent for cars with engine capacity of up to 1,000cc, offering a total relief of 7 percent to customers. Lucky Motor Corporation (KIA, non-PAMA member) is estimated to have made sales of around 23,000 units during the year, according to Topline Research.

In FY2021, sales of 1,300cc and above car sales were recorded at 75,097 units, up 91 percent compared with the last year’s sales of 39,386 units. In June, 7,042 units of 1,300cc and above cars were sold, including 2,826 units of Honda Civic and City, 208 units of Suzuki Swift, 1,862 units of Toyota Corolla, 1,876 units of Toyota Yaris and 270 units of Hyundai Elantra.

Sales of 1,000cc cars increased by 56 percent to 30,169 units in FY2021 from 19,291 units in FY2020. In June, 3,124 cars of 1,000cc were sold compared to 1,306 units in June last year.

Below 1,000 cc cars, sales were recorded at 45,916 units from 37,778 units sold last year. In June, 1,403 cars were sold, down from 1,963 units of June last year.

Sales of buses and trucks rose to 4,347 units in FY2021 from 3,647 units in FY2020. Sales of jeeps increased to 11,306 units from 3,459 units. Pick-up sales increased to 18,909 units from 12,048 units. Sales of tractors increased to 50,685 units from 32,727 units. Rickshaws and motor bikes’ sales rose 39 percent to 1.9 million units from 1.3 million units of last year.