Suzuki, Honda, and Toyota, collectively known as Japan’s ‘Big Three’ in the auto industry, are projected to report a combined sales volume of 87,612 units in Pakistan for the fiscal year 2023-24.
This marks a drastic 23% decline year-over-year and represents a 21-year low, according to a report by JS Research released on Tuesday.
The substantial drop in sales is attributed to reduced consumer purchasing power, increased imports of used vehicles, and higher car prices resulting from currency depreciation and increased taxes on auto manufacturers. In the previous fiscal year 2022-23, the ‘Big Three’ sold a total of 113,346 units.
March saw a 3% month-on-month decrease in car sales in Pakistan, underscoring the ongoing challenges facing the automotive sector amid rising inflation, currency fluctuations, and shifting consumer preferences.
Despite the overall downturn, June 2024 is expected to witness a nearly doubled sales volume compared to the previous year, totaling 10,140 units. This surge is primarily due to a low base effect caused by plant shutdowns at Indus Motor Company Limited (INDU) and Pak Suzuki Motor Company (PSMC) in the same period last year.
Wadee Zaman, auto analyst at JS Research, commented on the outlook, noting that while the fiscal year 2025 budget included some incentives such as extended concessional GST for hybrids until FY26, higher advance tax on local cars and the absence of regulatory duty on lower-priced imported vehicles (below 1,300cc) are likely to hinder a swift recovery for domestic automakers.
Amid economic uncertainties, the report also highlighted a downward trend in auto loans for the 23rd consecutive month, amounting to Rs233 billion, down 23% year-over-year. However, with recent monetary easing and anticipated further rate cuts, there is optimism for a potential increase in auto financing in the upcoming months.
