Handbrake: Car sales drop to lowest level in 2011
Budget uncertainty holds back transactions in market: Analyst.
KARACHI:
Car sales dropped to their lowest level this year in May as the sector became uncertain of the measures that will be taken in the budget.
Sales dropped six per cent to 11,479 units in May against 12,172 units sold in April, according to data released by Pakistan Automotive Manufacturers Association on Saturday.
This is a trend seen over the years, said Topline Securities analyst Furqan Punjani, adding that consumers and retailers both tend to hold back on buying or selling a month before the budget.
The budget, announced on June 3, removed special excise duty and decreased GST on car sales tfrom 17% to 16%. This will lead to cars prices falling approximately two to three per cent and improving sales, said Punjani.
We are talking roughly of around Rs35,000 per car difference from these measures, said Punjani while terming it significant.
Sales fell the most in the last two weeks of the month, says an industry official.
Toyota Corolla – the highest selling car of the year – sales fell 19 per cent despite the company introducing new models of the car last month. The new models, however, came with a Rs40,000 higher price tag.
“Increasing prices may act as a bump to a significant growth in its sales going forward,” said an analyst when the company introduced new models.
Honda sales plummeted 73 per cent with City leading the way as it sales fell to 582 units from 1,028 units.
The company’s production level more than halved in May that caused a slowdown in sales, analyst said.
“Sales in June might also witness a similar trend,” added Punjani.
Published in The Express Tribune, June 12th, 2011.
Car sales dropped to their lowest level this year in May as the sector became uncertain of the measures that will be taken in the budget.
Sales dropped six per cent to 11,479 units in May against 12,172 units sold in April, according to data released by Pakistan Automotive Manufacturers Association on Saturday.
This is a trend seen over the years, said Topline Securities analyst Furqan Punjani, adding that consumers and retailers both tend to hold back on buying or selling a month before the budget.
The budget, announced on June 3, removed special excise duty and decreased GST on car sales tfrom 17% to 16%. This will lead to cars prices falling approximately two to three per cent and improving sales, said Punjani.
We are talking roughly of around Rs35,000 per car difference from these measures, said Punjani while terming it significant.
Sales fell the most in the last two weeks of the month, says an industry official.
Toyota Corolla – the highest selling car of the year – sales fell 19 per cent despite the company introducing new models of the car last month. The new models, however, came with a Rs40,000 higher price tag.
“Increasing prices may act as a bump to a significant growth in its sales going forward,” said an analyst when the company introduced new models.
Honda sales plummeted 73 per cent with City leading the way as it sales fell to 582 units from 1,028 units.
The company’s production level more than halved in May that caused a slowdown in sales, analyst said.
“Sales in June might also witness a similar trend,” added Punjani.
Published in The Express Tribune, June 12th, 2011.