Auto industry sales fall 4% in July-September

Records worst Q1 performance since 2013

KARACHI: Despite an improvement of 3% year-on-year in car sales in September 2018, the industry has reported its worst first-quarter sales since 2013, which marked a decline of 4%.

Sales stood at 19,345 units in the previous month compared to 18,798 units in September 2017.

Pakistan’s auto sales have shown a growing pattern in the recent past, however, in the last couple of months they have displayed a declining tendency. It has also been for the first time that auto sales declined in the first two months of a fiscal year - July and August - since 2015.

“Breaking the trend of falling volumes in the past couple of months, car sales in September rose by 3%. Sales are also up by 10% on a month-on-month basis due to a higher number of working days in September as compared to August,” said Topline Securities Research Analyst Daniyal Adil.

“The decline in industry sales was largely offset by higher Honda sales, which increased by 32%. However, higher Honda sales are due to the low base effect since the company’s sales were low in September last year,” he added.

Adil said they were expecting significant demand contraction in the auto sector due to a deteriorating macroeconomic environment, multiple price hikes since December last year and the impact of law requiring car purchasers to be tax return filers.

Another hike in car prices is expected due to the recent rupee depreciation. Rupee on Tuesday weakened 7.5% against the US dollar. This would lead to a further decline in volumetric sales within the auto sector as consumers’ purchasing power shrinks.



During September 2018, Honda recorded a significant increase in sales volume which increased 32% year-on-year. On a sequential basis, unit sales increased by 14% month-on-month while first quarter sales were up by 7%.

Variant-wise, Civic and City sales rose by 47% year-on-year while BR-V sales continued to decline, falling by 35% year-on-year.

Indus Motor’s sales remained flat on a year-on-year basis. However, it recorded a 2% decrease in units sold on a month-on-month basis. Its quarterly sales stood at 15,419 units, up by 2%.

During September, sales were led by Corolla, up by 8%. On the other hand, Hilux sales saw a rapid decline, down by 42%, reversing the trend of high growth witnessed in the first two months of FY19.



Simultaneously, Fortuner sales also continued to fall by 29%. Higher sales last year in the segment has been attributed to elections.

Meanwhile, Pak Suzuki continued to report decline in volumes, with September sales down by 5%. However, sales were up 14% on a month-on-month basis. During the quarter, unit sales were down by 10%, to 29,478 units.

During September, Wagon-R and Swift led the growth chart up by 61% and 41% respectively. However, unit sales were dragged down by 37% and 23% decline in Mehran and Bolan, respectively.

Published in The Express Tribune, October 11^th, 2018.

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