Local car sales rev up 66%

Increase mainly due to Punjab taxi scheme and increased auto financing

KARACHI: Local auto sales (including LCVs, vans and jeeps) jumped to 93,570 units from 56,339 units in the first five months (Jul-Nov) of fiscal year 2015-16, up 66% compared to the same period last fiscal year, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

“Punjab taxi scheme and increased auto financing due to record low interest rates have fuelled automobile demand in the country,” Global Research analyst Asad Raza Nayani told The Express Tribune.

“Local auto makers have passed on the recent increase of 1% in import duty imposed by the government, but it will not affect car sales because it makes a small percentage in the overall car prices,” he added.

Both Indus Motor and Honda Atlas have increased car prices by 1-1.5% owing to the 1% hike in customs duty. Car assemblers have passed on the hike owing to a strong demand in the country.



Topline Securities report said that it now forecasts local car sales to grow at 13% in fiscal year 2015-16 to reach 203,941 units. This lower growth is due to completion of taxi scheme in February 2016 and decline in Honda Civic volumes in anticipation of new model, which is expected to hit the market in July 2016.

Analysts believe investors are bullish over the local auto industry because new models have received a positive response. They also say that the situation will dramatically improve if the government announces the new auto policy in the coming months.

The trucks and buses segment has also posted an increase of 39% to 2,115 units during the last five months of fiscal year 2015-16. Analysts attribute this surge in demand to the China Pakistan Economic Corridor (CPEC) and the improving law and order situation in the country.

Published in The Express Tribune, December 12^th, 2015.

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