Auto sector records 46% growth

On a month-on-month basis, sales remain flat in May 2022


Our Correspondent June 14, 2022
Asif said auto industry is witnessing slowdown due to multiple price revisions of vehicles coupled with rising automobile financing rates, higher inflation and soaring fuel costs. PHOTO: FILE

print-news
KARACHI:

Despite high car prices, Pakistan’s auto sector recorded a growth of 46% to about 27,000 units in May 2022 compared to the corresponding month of last year.

Car sales, including sales of non-PAMA (Pakistan Automotive Manufacturers Association), came in at around 27,000 units, which was almost flat month-on-month amid higher car prices and Eid holidays at the start of month, said Topline Research auto analyst Sunny Kumar. “The same is up by 46% year-on-year.”

Ismail Iqbal Securities auto analyst Muqeet Naeem said “if we take only PAMA data for May 2022, the industry car sales remained flattish at a growth of 2% month-on-month, clocking in at 22,893 units. In 11 months of fiscal year 2022, industry car sales reached 251,000 units, up by 50%, which is the highest ever 11-month sales numbers,” he added.

Analyst Kumar stated that the 50% increase in auto sales in 11 months of financial year 2022 was led by macro recovery.

“The weakening of demand is yet to be visible in automobiles as the higher lead times support volumetric growth,” Muqeet Naeem said.

“We expect demand contraction by the end of CY2022 due to higher interest rates, imposition of CVT, increase in advance taxes in the budget for FY23, restrictions on auto financing and the likely third round of price hike by the automobile players.”

Economic slowdown, increase in interest rates and further tightening of financing requirements by the State Bank of Pakistan (SBP) will significantly impact car sales moving ahead, said Sunny Kumar while supporting the view.

Hyundai Nishat posted strong numbers registering an increase of 33% month-on-month led by increase in sales of Elantra, 148% month-on-month, and Sonata with 37% month-on-month, said Sunny.

Honda Atlas Car (HCAR) recorded second highest increase of 11% month-on-month to 2,910 units in May 2022 led by increase in sales of City and Civic by 18% month-on-month. Similarly, Indus Motors (INDU) also posted increase of 2% month-on-month due to increase in sales of Corolla and Yaris by 4% month-on-month.

Pak Suzuki (PSMC) was the only player which reported decline of 3% month-on-month to 12,212 units in May 2022. All variant of the company reported decline on month-on-month basis except for Wagon R and Alto where sales were up by 24% month-on-month and 9% month-on-month respectively.

Amongst Tractors, Millat Tractors (MTL) recorded increase of 12% month-on-month while Al Ghazi Tractors (AGTL) recorded decline of 8% month-on-month.

Pakistan bike sales were down by 2% month-on-month while it remained flat on year-on-year in May 2022. This takes 11 months of financial year 2022 bike sales to 1.7 million units, down 4% year-on-year.

Trucks and buses sales were up 3% month-on-month and 23% year-on-year in May 2022. This takes 11 months of financial year 2022 sales to 5,909 units, up 50% year-on-year led by increased transportation activity.

Auto expert Arsalan Hanif said that the growth in auto numbers is mainly due to pre-budget buying in anticipation of taxes increase.

Published in The Express Tribune, June 14th, 2022.

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

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ