November auto sales drop 11pc

KARACHI: Auto sales fell by 11 percent in November as a struggling economy made consumers reluctant to spend on big-ticket items and high interest rate and vehicle costs will drive down sales further in coming months, industry data showed on Monday.

The sales of cars dropped 18,700 in November from 21,000 in October. Sales however increased 29 percent year-on-year in November. In the first five months of current fiscal year of 2021/22, sales jumped by 65 percent.

Analysts said the market had reacted to increase in cars prices, interest rates hike, stricter auto financing conditions and supply chain issues of the industry. Analyst Arsalan Hanif at Arif Habib Brokerage said the market was already anticipating the price of cars to go up in November.

“Therefore, the people who booked cars to be delivered before November were flocking to showrooms to put pressure on them to deliver cars before prices go up,” Hanif said.

The data of car sales are complied when cars are delivered and not when orders are booked. “This is the reason October car sales are high,” Hanif added. Pak Suzuki was the most affected company with its sales dropping 17 percent. Company’s top selling car Alto saw its sales dropping by 52 percent to 2,420 units. However, year on year, the company’s sales have gone up by 25 percent.

“But comparison with last year doesn’t say much as the year was affected by the pandemic,” said analyst Umair Naseer. Naseer said interest rates hike and stricter auto loans have also affected car sales. Car manufactures also stopped booking of a few models, which was also a soften sales in November.

“I expect car sales may further go down in months to come as the market fully induces the impact of increase in car price, stricter central bank conditions and increase in policy rates,” Naseer added. Indus Motor Company posted a month on month decline of 8 percent with its top selling car Corolla’s sales dropped by 17 percent. Its year-on-year sale increased 28 percent.

Honda sales increased by 13 percent. The company sold 237 units of BRV in November. New entrant Hyundai Nishat sales fell 30 percent in November. It sold 748 vehicles against 1,068 in October. Tractor’s sales also dropped 14 percent to 4,617 units. AGTL saw a significant slump of 27 percent while MTL sales dropped by seven percent.

In the two-wheel segment, the bike sales went up by a measly one percent in the first five months of the fiscal year 2022 to 779,400 bikes sold in the ongoing fiscal year. The country's top bike maker, Atlas Honda, posted highest ever monthly sales of 128,503 units in November with a three percent increase compared to October.