Car sales sprint 73 per cent

Indus Motor takes over as market leader from Suzuki in January.

KARACHI: Car sales zoomed 73 per cent in the first month of 2011 compared to December 2010 as customers rushed to get hold of new models.

Local assemblers sold 12,934 cars during January compared with sales of 7,446 units in the preceding month, according to data released by Pakistan Automotive Manufacturers Association on Thursday.

“This is a natural phenomenon which happens every year,” said Topline Securities analyst Furqan Punjani. Sales tend to slow down from November as people wait for the new year to buy a car as the new model has a higher monetary value and new features in some cases, added Punjani.

Indus Motor, the maker of Toyota Corolla, stole the crown of market leader in cars from Pak Suzuki Motor Company as it managed to sell 5,568 units while the latter sold 5,410 units.

Toyota Corolla alone marked sales of 5,032 units which almost matched all of Suzuki’s 5,410 units sold in January.

Ups and downs in economy do not really matter for Corolla as it is the car of rural areas. The main source of income of people in these areas is agriculture, which does well all year round, said Punjani.

“People in rural areas will buy a Corolla or settle with a motorcycle, there is no other car they would opt for,” added Punjani.

Honda sales rose to 1,914 units, the highest level seen in the last six months.

Sales of trucks and buses remained stable as 273 trucks and buses were sold in January against 267 in December.

The trend in car sales was not witnessed in motorcycle and three-wheeler sales as they grew marginally by five per cent to 71,380 compared with 68,117 units in the same period last year.

Looking ahead

The current month is expected to remain sluggish for Pak Suzuki Motor Company as the company has stopped booking of CNG cars. The company’s sales are expected to decline by 10 to 12 per cent in February, predicted Punjani. Indus Motor’s Coure will be the prime beneficiary of the decline in Suzuki sales, analyst said Punjani.

Although sales are improving, gross margins are expected to shrink as cost pressures will remain a big concern for local assemblers as their ability to pass on the cost to customers is reduced following the government’s decision to increase the age limit for imported used cars from three to five years, concluded Punjani.

Published in The Express Tribune, February 11^th, 2011.