KARACHI: Locally assembled automobile sales, including jeeps and light commercial vehicles, jumped to 23,341 units in October 2017 – the highest in any month, up 46% compared with 15,988 units in the same month of previous year, showed data released by the Pakistan Automotive Manufacturers Association (PAMA) on Monday.
“This is happening due to the recent change in import procedures; the ongoing disruption to imports of used cars has contributed to the strong demand,” Topline Securities commented in its report.
Last month, the government enhanced the regulatory duty by up to 350% on 356 essential and luxury goods to control the growing import bill. The duty also impacted used and new car imports, bringing all such imports to a standstill.
Analysts say the demand for imported cars, especially used cars, is now shifting to locally assembled vehicles, giving a big boost to the domestic industry. Industry sales in the first four months (Jul-Oct) of fiscal year 2017-18 exhibited 32% growth to 83,809 units.
Topline said if the trend persisted, it may revise its full-year sales estimate to 236,000 units, up 10% from previous estimates. Pak Suzuki Motor Company is an apparent major beneficiary as most of the used car imports fall in the lower engine capacity category.
The company recorded a robust growth with sales soaring 53% year-on-year as comparatively lower-priced models such as Mehran (up 41% year-on-year), Wagon R (up 141%) and Cultus (up 23%) registered strong sales.
For Pak Suzuki, sales for Jul-Oct FY18 were up 36% year-on-year to 46,941 units.
Sales of Honda Atlas Cars stood at 4,506 units in October, rebounding 31% month-on-month (50% year-on-year) after production last month was affected by extended holidays.
Honda’s Jul-Oct sales grew 55% to 17,110 units in the wake of success of new models Honda Civic, BRV and recently revamped City.
Indus Motor, the makers of Toyota Corolla, lagged behind peers, posting an increase of 28% year-on-year as it continued to face capacity constraints. The higher year-on-year growth was attributed to the production issues faced in the previous year. Indus Motor’s sales for Jul-Oct were up 10%.
Tractor sales continued to be on an upward trajectory with sales growing 28% year-on-year in October 2017.
Millat Tractors outperformed the market by exhibiting 36% growth. In four months, tractor sales reached 21,757 units.
In the near future, lower general sales tax on tractor purchase and fertiliser subsidy were expected to help tractor sales, the report said. Truck and bus sales in October 2017 remained strong, growing 24% year-on-year. In Jul-Oct, sales rose 23% Y0Y. Motorcycle and three-wheeler sales for October 2017 grew 18% year-on-year due to rising disposable income of the lower middle class. In four months, sales were up 74% YoY.
Published in The Express Tribune, November 14th, 2017.