Automobile sales surge by staggering 114% in July

Triple digit growth comes on back of reduction in auto financing markup, dip in auto prices

KARACHI:

The number of cars sold in the country soared by a massive 114% to 24,918 units in July 2021 on a year-on-year basis due to decline in mark-up rate for auto financing coupled with a reduction in car prices announced in budget 2020-21.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA) on Wednesday, car sales figure stood at 11,659 units in July 2020.

In a report, Topline Securities analyst Umair Naseer said that if dispatches of Lucky Motor Corporation (non-member of PAMA) are included, then the amount of total car sales in July 2021 would stand at approximately 27,000, an increase of 105% year-on-year and 75% month-on-month.

“To recall, the government had announced reliefs and tax cuts for automobile consumers in the federal budget 2021-22 which resulted in across the board reduction in car prices,” he said. “As a result, customers held back there purchases till July 2021.”

A report from Arif Habib Limited stated that triple digit growth in sales volume of automobiles was witnessed due to low policy rate as auto financing increased by Rs97 billion during the previous fiscal year.

It added that rapid economic growth also helped lift the sales figure.

“Government efforts to provide relief to the common man became evident in July’s sales numbers as the leadership reduced sales tax on cars having engine capacity of below 1,000cc along with a reduction in the federal excise duty resulting in a decline in car prices,” it said.

Pak Suzuki Motor Company recorded the largest increase in sales as it shipped 15,181 vehicles during the month, which was 204% higher than 4,991 units dispatched in July 2020.

Indus Motor Company recorded 66% rise in sales as the firm supplied 6,715 cars to consumers in July 2021 compared to 4,043 units in same month last year.

On the flip side, Honda Atlas recorded a decline in sales as they fell from 2,467 units in July 2020 to 2,307 units last month, a drop of 6%. According to Topline Securities, the reduction was witnessed due to the anticipated roll out of new model of Honda City.

On the new-entrants front, Hyundai Nishat registered sales of 627 units in July 2021 with the inclusion of its new model “Sonata”.

Lucky Motor Corporation sold around 1,600 to 1,800 units in July 2021, the Topline Securities report added. On a monthly basis, car sales rose 81% as they amounted to 13,739 units in June 2021.

Published in The Express Tribune, August 12^th, 2021.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.