Growth in car sales

Pakistan’s automobile sector has been in the throes of a long decline, which meant sluggish sales and a steep fall in revenues. The leading carmakers have had a torrid time weathering this phase brought on in part by a weakening of the rupee and other sundry factors. A reversal of fortunes, however, appears to be on the horizon. A report in this newspaper says the months-long pain for Pakistan’s automobile sector eased somewhat with an increase of 16% in year-on-year car sales, which were recorded at 11,678 units in August 2020 as compared to 10,102 units in the corresponding period of previous year, according to the Pakistan Automotive Manufacturers Association (PAMA).

The reversal of trend came on the back of lower interest rates coupled with a recovery in economic activity. Indus Motor Company and Honda Atlas Cars registered sales growth, but Pak Suzuki Motor Company recorded a decline in sales volume. “Kia Lucky Motors (which is not a member of PAMA) continued to perform well,” says an analyst. “As per our channel checks, the company recorded sales of 1,500 units in August 2020.” According to the analyst, the company is planning to switch production to double shift from January 2021 to meet higher customer demand.

Honda Atlas Cars recorded the highest increase in sales volume on a year-on-year basis with a 72% rise to 2,258 units. The company managed to sell 1,314 units in the same month of last year. Indus Motor enjoyed a 52% growth as sales rose from 2,173 units in August last year to 3,307 units in August 2020. On the other hand, Pak Suzuki Motor reported a 9% fall in sales to 6,003 units in August 2020 against 6,615 units in August 2019. On a month-on-month basis, all three major carmakers showed a modest performance as car sales crawled up only 1%. Fragile though the recovery may be, it casts hope for a better future for the industry.

 

Published in The Express Tribune, Septe0mber 14^th, 2020.

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