October car sales jump; growth seen moderating

KARACHI: Car sales climbed 45 percent in October versus a year on the back of an expanding economy, industry data showed on Thursday, but growth is seen moderating on rising borrowing cost and tight credit conditions.

October car sales increased 45 percent year-on-year and declined 8.2 percent month-on-month, with central bank decision on car financing to slowdown off-take in the near-term.

According to data released by Pakistan Automotive Manufacturers Association (PAMA), passenger car sales (PAMA member cars) increased by 45.14 percent to 17,413 units during October 21 compared with 11,997 units sold during October last year. However, October sales remained lower by 8.2 percent to 18,971 units of September 2021.

Cumulative sales in the first four months of FY21-22 (July-October) were recorded at 74,952 units, up by 71 percent to 43,865 units during the same period last year. Analysts said that though car sales increased during the outgoing month, some impact was expected on car financing after the State Bank of Pakistan increased the down payment limit and reduced the financing period to a maximum of five years. “The effect was visible on sale of smaller cars, which are mostly purchased by the low-income people on bank financing.” He said that due to an increase in car prices, inflation, and rupee depreciation, car sales would be affected in the coming days. In addition, the discount rate was also expected to be increased in the upcoming monetary policy. “Car financing will be affected resulting in a decline in car sales,” he added.

During this period, sales of 1300cc and above cars were recorded at 8,619 units, up 34.46 percent compared with sales of 6,410 units in the same period last year. It included 2,651 units of Honda Civic and City, 23 units of Suzuki Swift, 3,341 units of Toyota Corolla, 2,037 units of Toyota Yaris, 312 units of Hyundai Elantra, and 255 units of Hyundai Sonata.

In October, sales of cars with 1000cc engine capacity were 2,631 units, up from 2,014 units in the same month last year. However, October sales remained 44.42 percent lower compared to September sales of 4,734 units. Below 1000cc cars recorded sales at 6,163 units from 3,573 units sold during the same period last year. Similarly, buses and trucks saw an increase to 484 units in October 2021 from 366 units in October 2020. Jeep sales increased to 1,229 units from 822 units sold during the same period last year.

Pick-up sales increased to 2,360 units from 1,263 units during the same period last year. Sales of tractors rose to 5,361 units from 4,516 units. The sale of rickshaws and motorbikes slightly increased to 177,329 units during October 2021 against 176,082 units sold during the same period last year, despite awaited results for Sazgar three-wheeler.