Auto industry saw a robust month as car sales increased 57% year-on-year in February 2024, totaling 9,709 units, compared to 6,186 units sold in February 2023, data released by the Pakistan Automotive Manufacturers Association (PAMA) showed.
However, car sales witnessed a month-on-month decline of around 8% in February 2024.
The notable yearly surge is largely attributed to a low base effect, as import restrictions heavily damped the industry’s sales last year.
PAMA data shows that car sales in the first eight months (July-Feb) of the ongoing fiscal year FY24 recorded at nearly 60,000 units, down 41% YoY.
Among the three major Japanese car makers in Pakistan, only Indus Motor Company Limited (INDU) saw a decline in sequential sales, dropping by 26% MoM, though it increased by 13% YoY due to the aforementioned base effect.
Sales of Fortuner and Revo fell substantially, down 61% YoY and 55% MoM.
Sales of Corolla, Yaris, and Cross also decreased by 18% MoM, attributed to the high base due to the launch of the Corolla Cross last month.
Pak Suzuki Motor Company continued its momentum with strong sales figures, marking a 7% MoM increase and an impressive 5x YoY growth.
PSMC’s Alto, Swift, and Cultus were the key drivers behind this jump in sales. The strong sales of Swift despite the recent price hikes indicate higher margins in future quarters.
Honda Atlas Cars (Pakistan) Limited (HCAR) sales increased by 13% MoM but fell 7% YoY.
The sedan portfolio, comprising the Civic and City, showed a 14% MoM and 11% YoY growth, maintaining its position as the company’s top performer, while its SUV variants (HR-V and BR-V) continue to lag behind competitors.
On the flip side, tractor sales declined 12% MoM and remained flat YoY with sales of 3,366 units. This takes the total tractors sold in 8MFY24 to 30,591, up 68% YoY.
Millat Tractors Limited (MTL) saw a 10 percentage points contraction in market share to 64% but continues to remain the market leader.
MTL’s sales were down 23% MoM and 17% YoY, giving its competitor Al-Ghazi Tractors (AGTL) the opportunity to increase its market share to 36%, as its sales were up 22% MoM and 66% YoY.
Truck sales continued to show strength, soaring by 65% MoM; truck production number of 327 units exceeded their sales – the highest since Sep 2022 – suggesting sustained strong demand in the coming month due to the implementation of the axle load regime.
According to IMS Research, the auto industry continues to grapple with challenges stemming from elevated interest rates and inflation. The recent enforcement of SRO 370(I)/2024 has raised the sales tax to 25% on cars priced at Rs 4 million or higher, further dampening demand.
Previously, the 25% sales tax was only applicable to cars with an engine capacity of 1400CC and above.
This change will particularly impact the 1300CC variants of Yaris and City, following inevitable price increases.
Due to disruptions caused by the COVID-19 pandemic in the previous year, there might have been pent-up demand for vehicles, leading to a surge in purchases once conditions improved.