Car sales contract 13% in August 2021

KARACHI:

After registering a triple-digit growth in July 2021, the automobile sales in Pakistan declined 13% in August on a month-on-month basis and stood at 21,751 units primarily due to a high base effect in July.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA) on Friday, car sales had been calculated at 24,918 units in July 2021.

“Pakistan’s car sales in August 2021 clocked in at around 24,000 units (if KIA, a non-member of PAMA is considered),” said Topline Securities analyst Umair Naseer in a report.

“On a month-on-month basis, car sales were down due to high base as Indus Motor and Pak Suzuki had recorded highest-ever monthly sales in July 2021 due to announcement of incentives in budget and a strong demand backlog.”

Echoing his views, Taurus Securities analyst Mustajab Ali Kazmi said that customers held their orders in June and rushed to book vehicles in July after the government announced major incentives for buyers in the budget for 2021-22.

As a result, automobile sales soared significantly in July and now the levels were declining back to normal, hence a contraction was experienced, he said.

Cedar Capital senior research analyst Waqas Mustafa added that the global chip shortage had finally hit Pakistan and car companies placed orders for certain models on hold.

“The delay in dispatching orders resulted in a decline in car sales,” he said.

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Company-wise, Pak Suzuki Motor Company remained the major laggard as its sales fell 21% month-on-month to 12,062 units in August 2021.

Indus Motor Company fared no better and recorded a decline of 16% in its sales, which stood at 5,639 units in the month under review.

On the flip side, Honda Atlas Cars posted a 40% increase in its automobile sales that came in at 3,230 units.

“Honda Atlas sales were up in August 2021 amid launch of its new model of Honda City during the month,” said Naseer.

Similarly, sales of Hyundai Nishat Motor increased 53% to 712 units.

Naseer highlighted that Hyundai Nishat posted growth due to strong demand for its recently launched cars - Hyundai Elantra and Sonata.

“On a year-on-year basis, automobile dispatches rose 85% in August 2021, led by economic recovery, low interest rates and the launch of new models,” Naseer said in the report.

Published in The Express Tribune, September 11^th, 2021.

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