According to analysts at Topline Securities, Pakistan’s automotive sector has suffered a huge setback, with automobile sales falling by a whopping 47 percent over the first two months of July and August 2023.
Pakistan’s Automobile Sector
This decline in car sales reflects a number of difficult conditions that have hurt the business.
Analysts claimed that car sales in Pakistan reached 7,600 units in August 2023, reflecting a 49 percent month-on-month (MoM) increase but a 36 percent year-on-year (YoY) fall.
According to the Pakistan Automotive Manufacturers Association (PAMA).When non-PAMA members are included, car sales reach 9,000 units, a 46 percent rise year on year.
Concerns with CKD kits
The considerable month-on-month increase in car sales can be ascribed to the resolution of concerns with Completely Knocked Down (CKD) kit imports.
Nonetheless, despite this short-term improvement, the automobile sector’s success has been impeded by a number of obstacles.
The key reasons for the significant YoY fall in car sales have emerged as escalating car prices, expensive auto financing choices, and customers’ poor purchasing power.
These reasons have made it increasingly difficult for Pakistani consumers to purchase new vehicles, resulting in lower market demand.
Pak Suzuki With The Greatest Increase
Notably, Pak Suzuki (PSMC) saw the greatest increase in car sales, with a 75% MoM gain in August 2023, reaching 4,268 units.
This growth was mostly driven by higher sales of models including the Alto, Swift, and Cultus, which witnessed significant month-on-month gains.
Hyundai also saw a 37% MoM increase in sales, with the Tuscon model witnessing a 42% MoM increase to 465 units in August 2023.
Similarly, Honda Atlas Car (HCAR) increased by 36% month on month, reaching 674 units.
Indus Motors with 13% MoM gain
Indus Motors (INDU) reported a 13% MoM gain in sales, highlighted by a 43% MoM increase in sales of the Fortuner and Hilux models.
In the tractor industry, Al Ghazi Tractors (AGTL) and Millat Tractors (MTL) recorded 52 percent and 46 percent MoM growth in August 2023, respectively.
This boosted total tractor industry sales in the first two months of fiscal year 2023-24 to 6,645 units, a 27 percent rise year on year.
Truck and bus sales, on the other hand, fell 14% MoM and 51% YoY to 167 units in August 2023, resulting in a total industry sales decrease of 41% YoY to 362 units in the first two months of the fiscal year.
Meanwhile, bike sales in Pakistan increased by 20% month on month but fell by 14% year on year in August 2023.
ATLH reported 75,000 unit sales
Atlas Honda (ATLH) reported 75,000 unit sales, a 21% MoM rise but a 12% YoY drop, owing mostly to rising bike prices and consumers’ poor purchasing power.
In Pakistan, the performance of the automotive sector is still highly linked to economic conditions, customer attitude, and issues such as inflation and financing costs.
As they negotiate the difficulties and opportunities ahead, industry stakeholders will be keenly monitoring these dynamics.
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