Car sales drop 18pc to 22,370 units in April

Karachi: Car sales shrank 18 percent in April 2022 over March as almost all the auto assemblers blew up the price tags, citing higher costs and reduced working hours in Ramazan.

“We believe sales during the month remained under pressure owing to price hikes led by rupee depreciation, increase in taxes, rising costs, higher interest rates, and the impact of reduced working hours during Ramazan,” said Wasil Zaman, Research Analyst at JS Global.

The industry sold 22,370 units in April as compared to 27,202 in the previous month of March. However, year-on-year sales increased 30 percent against April 2021.

Zaman added that he was anticipating a declining trend in overall auto sales volume for the remaining part of the year as the impact of interest rates and higher cost-led price hikes would weigh in.

Sunny Kumar of Topline Securities also said sales decreased due to higher car prices, increase in taxes, uptick in commodity prices, and seasonal slowdown in the month of Ramazan.

Honda sales suffered the biggest decline of 28 percent month-on-month to 2,629 units in the month under review as sales of City and Civic slumped by 31 percent.

Similarly, Indus Motor Company also posted a fall of 18 percent month-on-month as sales of Corolla and its vans dropped 24 percent.

Pak Suzuki sales were dented by 16 percent month-on-month to 12,639 units. Sales of all its variants declined month-on-month except for Swift due to the launch of a new variant and Cultus because of ease of production.

“The weakening of demand is visible in the above 1300cc segment, while the 1,000cc category posted growth due to likely ease in supply chain, in our view,” said Muqeet Naeem, Research Analyst at Ismail Iqbal Securities.

“We expect demand to contract in FY23 due to likely higher interest rates environment, second round of price hike by all automobile players given the rising cost pressures and restrictions on auto financings,” Naeem added.

Hyundai Nishat sales were only down by 1 percent month-on-month to 1,287 units in April primarily due to an increase in sales of Porter, up 63 percent, and Sonata, up 17 percent.

Amongst Tractors, Al Ghazi Tractors (AGTL) recorded an increase of 2 percent in its sales month-on-month, while Millat Tractors (MT) reported a decline of 27 percent.

Motorcycle sales remained flat month-on-month, while they fell 7 percent year-on-year in April.

The ten-month sale volumes stood at 1.5 million units, down by 4 percent year-on-year.

Sales of trucks and buses also dwindled 20 percent month-on-month, while grew by 35 percent year-on-year in April, led by increased transportation activity.

Meanwhile, during the first ten months of the fiscal year 2022 (July 21 to April 22) the auto sales jumped 50 percent despite several hiccups including frequent car price hikes, long delivery periods, and auto financing curbs.

The industry sold 227,822 units in the first ten months as compared to 151,951 in the same period last year.