Car sales experienced a significant downturn in October, plummeting 26 percent month-on-month and a staggering 54 percent year-on-year, as per data from the Pakistan Automotive Manufacturers Association (PAMA).
Giving the details, PAMA reported a drop in car sales from 8,400 units in September to 6,200 units in October, while sales in October 2020 stood at 13,500 units. When considering non-PAMA members, overall car sales declined from 9,500 units in September to around 7,000 units in October, compared to 15,000 units in the same month last year.
The month-on-month decrease is largely attributed to supply chain disruptions that led some automakers to temporarily close their plants. The year-on-year decline is also linked to diminished demand, resulting from increased car prices due to currency depreciation, higher taxes, and expensive auto financing.
For the first four months of the fiscal year 2023-24 (July-June), PAMA recorded car sales at 27,163 units, marking a 44 percent decrease from the 48,573 units in the same period last year.
Although the State Bank of Pakistan (SBP) has eased import restrictions, the auto sector remains a lower priority compared to sectors like medicine and energy. Certain essential parts still face restrictions, significantly hindering the production capabilities of auto assemblers.
Dollar shortages have further affected the import of car parts and raw materials, leading to temporary shutdowns of plants by companies like Honda and Suzuki. Exchange rate volatility has added complexity to import planning and cost management for auto assemblers.
Among major car manufacturers, Honda Car and Indus Motors, makers of Toyota vehicles, reported the steepest declines in October, with sales down 66 percent and 34 percent month-on-month, respectively. Pak Suzuki, the market leader, recorded sales of 3,810 units, down 10 percent month-on-month.
In the tractor industry, serving the agricultural sector, Al Ghazi Tractors and Millat Tractors recorded a 5 percent and 4 percent month-on-month decline in sales, respectively. However, tractor sales in the first four months of the fiscal year rose 87 percent year-on-year to 17,296 units due to a lower base last year amid floods.
The truck and bus segment, reflective of industrial and transport sector activity, saw a 1 percent month-on-month and 44 percent year-on-year decline in sales to 183 units in October. In the first four months of the fiscal year, truck and bus sales fell 45 percent year-on-year to 730 units.
The motorcycle industry, catering to the low-income segment, experienced a 5 percent month-on-month and 11 percent year-on-year decline in sales in October. Atlas Honda, the market leader, recorded sales of 90,000 units, down 5 percent month-on-month and 5 percent year-on-year.
Motorcycle sales for the first four months of the fiscal year fell 10 percent year-on-year to 371,000 units due to higher bike prices and reduced consumer purchasing power.
