Improving law and order situation is the reason for growth in car sales among other factors. Photo: automobiles.honda.com
KARACHI: Local car sales jumped 29% year-on-year (YoY) during the first 10 months (Jul-April) of the current fiscal year.
During 10MFY16, local vehicle sales stood at 184,099 units against 142,814 units in the same period last year.
The reasons for the growth in car sales is increase in auto financing due to 42-year low interest rates, the Punjab government’s taxi scheme, improving law and order situation and overall improvement in the country’s economic situation.
Car sales continue to accelerate
Among individual companies, sales of Pak Suzuki (PSMC) increased 41% YoY to 109,628 units in 10MFY16 primarily due to the Punjab government taxi scheme. However, April’s figure alone decreased 18% year-on-year. On a month-on-month basis, volumes decreased by 1% in April 2016, amounting to 8,965 units.
Indus Motor (INDU) sold 52,987 units in 10MFY16 versus 45,978 units in 10MFY15. In April 2016, sales fell 6% YoY to 5,483 units.
On a MoM basis, sales declined 5% due to fewer working days in April 2016 compared to March 2016.
Honda Cars (HCAR) sold 21,293 units in 10MFY16 compared to 18,781 units in the same period last year. In April 2016, HCAR sold 2,751 units, up 16% YoY (flat MoM).
Volumes of Honda Civic are expected to dry out in coming months in anticipation of the new model in 2H2016.
Pakistan tractor segment posted a decline of 31% YoY during 10MFY16 to amount to 26,586 units. This decline can be attributed to a delay in the launch of the provincial tractor subsidy scheme which was announced by Punjab and Sindh government in the budget.
Car sales accelerate on cheap financing, taxi scheme
Millat tractors (MTL) and Al-Ghazi tractors (AGTL) both witnessed a decline in their sales volumes during 10MFY16 as farmers are waiting for the execution of announced subsidy schemes. MTL sold 15,974 units in 10MFY16 compared to 23,426 units in the same period last year. Sales of the company decreased by 29% YoY to 2,440 units in April 2016.
During 10MFY16, AGTL witnessed a decline of 30% YoY in sales to 9,882 units. Company sold 1,935 units in April 2016, up 23% YoY (7% MoM).
Published in The Express Tribune, May 11th, 2016.
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