Car sales drop to 13-month low

Published: August 11, 2012

Pak Suzuki Motor Company (PSMC) – saw sales decline by 53% month-on-month. PHOTO: FILE

KARACHI: Car sales, including Light Commercial Vehicles, vans and jeeps, plummeted 41% to 10,435 units in July 2012, the lowest since June 2011.

Conclusion of the Punjab government’s taxi scheme, termination of production of the Suzuki Alto, and prompt buying of dealers and individuals before price increases led to the downfall, said Topline Securities analyst Zeeshan Afzal. The Punjab government had allocated Rs4.5 billion in fiscal 2012 for the provision of 20,000 yellow cabs to the youth of the province.

With the completion of the Punjab government’s yellow cab scheme, the country’s largest assembler – the Pak Suzuki Motor Company (PSMC) – saw sales decline by 53% month-on-month. Note also that the PSMC registered zero sales for its Alto models, which have been phased out by the company.

Mounting pressure from imports also dented local automobile sales: imports rose 25% to 4,950 units in July 2012, and catered to 32% of overall demand in the country. By comparison, share of imports in fiscal 2011 and fiscal 2012 stood at 11% and 23%, respectively.

Other than these reasons, the month after the budget is traditionally slow for car sales, as buyers wait for tax announcements that may lead to price fluctuations.

Amongst individual companies, PSMC sales declined to 5,615 units – down 51% compared to June 2012 sales – while also 53% below sales figures from June last year, added Afzal.

The Mehran and Cultus models, both of which are PSMC’s major revenue contributors, also witnessed slowed sales by 39% and 33% year-on-year, respectively.

Indus Motors sold 3,087 units in July 2012, down 45% from 5,570 units sold in the June 2012. A major decline was witnessed in the country’s highest selling car – the Toyota Corolla – whose sales dropped to 2,464 units in July 2012, from 4,487units in previous month.

Published in The Express Tribune, August 11th, 2012.

n from last year’s level of $44.6 billion.

 

The current account deficit is forecast to reach $4.8 billion or 1.9% of gross domestic product (GDP).

The rosy projections have been made despite the fact that the balance of payments position will remain under pressure due to external debt repayments including repayments to the International Monetary Fund (IMF), declining export volumes, rising international oil prices and weak capital inflows.

Month-on-month data

The month-on-month trade statistics, however, depict a comparatively different picture than the year-on-year figures. The trade deficit in July shrank 12.7% compared to June due to higher decline in imports than in exports. Exports fell 3.92% in July over last month while imports dipped almost 8%, according to the PBS.

Published in The Express Tribune, August 11th, 2012.

Reader Comments (1)

  • khalsa
    Aug 11, 2012 - 8:21PM

    on one month pakistan announces increase in car sales and the other they announce the lowest ever sales? so much of fluctuation indicate abnormality in an economy

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