Car sales jump to 257,752 units in FY16

Increase of 12% comes on back of auto financing, govt’s Rozgar scheme

KARACHI: Thanks to the easy availability and lower cost of auto financing for the most part of the last fiscal year, sales of locally-assembled vehicles increased 12% to 257,752 units in 2015-16, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

Interest rates have hit a record low amid low inflation, resulting in an increasing number of people getting their auto purchases financed at relatively easier terms.



In particular, the increase in auto purchases in 2015-16 was led by higher car and heavy commercial vehicles (HCV) sales, PAMA data shows.

According to a research note issued by Taurus Securities on Wednesday, car sales grew 21% in 2015-16 to 216,568 units on the back of higher contribution from Pak Suzuki. Within the cars segment, the company’s sales increased by 28% over the year to 126,674 units. Its vehicles, Ravi and Bolan, recorded sales growth of 31% and 27%, respectively, thanks to the Punjab government’s Apna Rozgar Taxi Scheme.

As for Indus Motors and Honda Cars, their sales grew by 12% and 9% to 63,977 and 25,726 units, respectively, during the last fiscal year.



Sales of HCVs increased 40% to 6,566 units in the last fiscal year, data shows. In contrast, sales of tractors dropped 26% on an annual basis to 34,618 units due to seasonal down cycle, low farmer income and anticipated subsidy schemes, Taurus Securities said.

“In 2016-17, we expect auto sales would remain close to current levels despite completion of Apna Rozgar Taxi Scheme. We anticipate higher contribution from Honda due to its new Civic model launch and higher tractor sales,” it said while highlighting the export initiative by Millat Tractors and pro-agriculture measures introduced in the latest federal budget.

It added that ramping up of CPEC-related development projects coupled with higher development allocation would also spur demand for heavy commercial vehicles in the future.

Published in The Express Tribune, July 14^th, 2016.

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