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Thursday October 28, 2021

Auto sales surge 84pc to first-quarter record

October 13, 2021

KARACHI: Automakers on Tuesday reported a surged of record 84 percent to 69,000 units in first-quarter sales as tax breaks and lending incentives helped industry turn the corner on a coronavirus-induced weak same quarter last year.

Pakistan Automotive Manufacturers Association (PAMA) data showed Pak Suzuki sales increased 120 percent in the first quarter compared to the same period last year.

The company, which mainly operates in the 1000cc and below category, saw its sales surge 72 percent in September compared to the same month last year. However, September sales dropped 7 percent month-on-month.

Indus Motor Company, which sells Toyota cars in Pakistan, saw 59 percent rise in sales during July-September FY22, compared with the same quarter last year. The company’s year-on-year sales climbed up 44 percent, with MoM sales rising 12 percent.

Honda Atlas sales increased 23 percent during the first quarter, 34 percent YoY, and 13 percent MoM.

PAMA data showed that Tractor sales also increased by 12 percent during the first quarter to just over 12,000 units. In September, tractor sales stood at 4,377 units, which were 2 percent higher than last year and 32 percent higher than August.

Similarly, motorcycle sales increased by 9 percent during the first quarter to over 318,000 units. In September, the two-wheel sales stood at nearly 113,000, 2 percent higher than last year and 10 percent higher than August.

LCVs and 4x4 vehicles such as Fortuner, Ravi and Tucson, also showed an increase of 96 percent in sales during the quarter. Sales of cars sporting 1300cc and above engines increased 39 percent, 1000cc car sales went up 173 percent whereas sales of below 1000cc cars surged 105 percent during the quarter under review.

PAMA mainly reports data of Toyota, Suzuki and Honda and now newcomer Hyundai. The data does not reflect the overall number of cars sold in the country, as new entrants such as Kia, Changan and some other OEMs have not been sharing their sales data.

Analysts attributed the rise to reduction in government levies, which brought the prices down.

Arif Habib Limited in a industry report said the number of units sold in the first quarter was the highest ever, with sales of 1000cc and below cars more than doubling during the quarter.

“The auto sector sales have been high during the quarter mainly because of falling car prices,” said Arsalan Hanif, Research Analyst, Arif Habib Limited. “Government reduced duties and taxes, which saw car prices going down.”

The government in the budget reduced the Federal Excise Duty on all vehicles by 2.5 percent. Sales tax was also slashed on vehicles below 1000cc from 17 percent to 12.5 percent. Additional customs duty of 7 percent was also removed on cars below 1000cc, whereas on cars above 1000cc it was brought down to 2 percent. It pushed car prices down from Rs60,000 to even up to Rs400,000.

Research Analyst Waqas Ghani at JS Global also attributed the jump in the car sales to reduction in car prices during the quarter.