Business

Auto sales crawl up 2% in March 2019

Slowdown in economy cited as reason for slow growth

Our Correspondent April 11, 2019

A staffer polishes Hyundai vehicles at a showroom in Goyang, South Korea, last month. PHOTO: REUTERS

KARACHI: Pakistan’s auto sales increased 2% to 22,866 units in March 2019, according to the Pakistan Automotive Manufacturers Association (PAMA). Sales were recorded at 22,380 units in March 2018.

The meagre growth came on the back of a general slowdown in the economy.

On a month-on-month basis, the sales were up 14% in March 2019 from 20,117 units in February 2019. On the contrary, sales in first nine months of FY19 declined 4% to 185,000 units.

“This decline can be attributed to the slowdown in economy and increase in car prices,” according to a Topline Securities’ report.

“The car segment of 800cc-1,000cc witnessed the largest month-on-month growth of 35% in March 2019, which was the highest in the current calendar year,” said Hammad Tariq, analyst at Shajar Capital.

Indus Motor reported an 11% decline in sales in March 2019 to 5,157 units compared to the same month of previous year.

“The company witnessed the decline mainly on account of lower sales of Fortuner and Hilux, which were down 63% and 65% respectively year-on-year,” according to Topline Securities. This was due to the 10% federal excise duty (FED) imposed on vehicles of more than 1,700cc. Corolla sales posted growth of 2% in the month under review.

Pak Suzuki Motor Company emerged as the leader with the highest sales in the month. The company’s sales were recorded at 13,815 units, up 23% from 11,232 units in March 2018.

“The growth in sales was led by the demand for WagonR with growth of 63% year-on-year,” said the Topline report.

On the other hand, Honda Atlas Car sales fell 29% in March 2019 compared with March 2018.

It was the steepest decline during a month since May 2012, stated the Topline report. In addition to the economic factors, a decline in sales of City and Civic variants came due to anticipated launch of a new variant Civic 1.5 Turbo in April 2019.

“Going forward, overall demand for automobiles is expected to remain subdued due to the recent hike in policy rate, resulting in higher borrowing cost for auto financing,” said Topline Securities.

Published in The Express Tribune, April 11^th, 2019.

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