Automobile sales rise by 32% in Feb

Expert says growth led by vehicles below 1,000cc engine capacity

KARACHI:

Automobile sales registered a handsome growth of 32% year-on-year to 21,664 units in February 2022.

On a month-on-month basis, the sales increased by 5%, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

During the first eight months of current fiscal year, automobile sales registered an increase of around 56% year-on-year to 178,250 units.

Talking to The Express Tribune, Ismail Iqbal Securities analyst Muqeet Naeem underlined that the growth was led by vehicles below 1,000cc engine capacity, as Suzuki Alto sales doubled to 7,175 units.

However, vehicles of 1,300cc and above capacity showed a decline of 32% in sales, mainly led by the dip in sales of Corolla/ Yaris and City/ Civic by 34% and 37% respectively.

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“Volumes are increasing, new models are being introduced, bookings for new models have also shown an outstanding response,” said auto expert Mashood Ali Khan.

“But the industry is expected to face the fallout of inflation in the coming months,” he said, adding that with new global uncertainties, the market may witness a downward trend after August 2022.

Topline Research analyst Sunny Kumar underlined that the increase in month-on-month sales was led by Pak Suzuki Motor and Hyundai Nishat Motors.

Pak Suzuki sales increased by 40% month-on-month, led by the growth in sales of Alto by 86% and Cultus by 44%, he said.

“The significant jump is due to the ease in production as compared to the previous month,” he added.

Hyundai Nishat sold 1,469 units in February 2022, up 2.4 times on a month-on-month basis.

Tucson sales rose 5.7 times to 774 units, while Elantra sales grew 2.9 times to 312 units amid greater acceptability of the new entrants, he pointed out.

Honda Atlas Cars and Indus Motor posted a decline of 32% month-on-month each in sales during February 2022, he noted.

In the first eight months of 2021-22, auto sales were up by around 56%, supported by the macroeconomic recovery and single-digit interest rate, he mentioned.

In the tractor segment, sales of Al-Ghazi Tractors recorded an increase of 5% month-on-month and 42% year-on-year.

“Millat Tractors has yet to post the sales figure,” he said.

In the category of motorbikes, sales registered a decline of 11% month-on-month and 12% year-on-year in February 2022. “This takes bike sales to 1.2 million units in the first eight months of 2021-22, down 3% year-on-year.”

AHL Head of Research Tahir Abbas underlined that trucks and buses sales registered a decline of 30% month-on-month, while their sales grew by 66% year-on-year in February 2022, mainly driven by increased transportation activity.

Regarding Pak Suzuki, Insight Securities analyst Ali Asif pointed out that sales increased as the company overcame chip shortage coupled with the reopening of Alto VXL booking.

People were awaiting the launch of the new Civic, which triggered the decline in sales of Honda Atlas Cars, amid the closure of bookings for the old Civic model.

The decline in tractor sales was mainly due to Millat Tractor’s operational restrictions in the wake of prolonged delay in release of Rs6.2 billion worth of sales tax refunds, he mentioned.

Published in The Express Tribune, March 11^th, 2022.

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