Auto sales in Pakistan have seen a significant boost in March 2023, jumping by 61% month-on-month (MoM) to 9400 units. This comes as a much-needed relief for the industry which has been struggling with a 66% year-on-year (YoY) slump.
According to the latest data released by the Pakistan Automotive Manufacturers Association (PAMA), the industry has been facing a slowdown in the sales of cars, light commercial vehicles, vans and jeeps.
“The availability of completely knocked down (CKD) parts amid the easing of Letters of Credit issues has led to the recent surge in sales,” said Sunny Kumar, auto analyst at Topline Research.
The nine months of financial year 2023 sales have still seen a decline of 46% year-on-year (YoY) primarily attributable to the non-availability of CKDs, expensive auto financing, escalating car prices, and low purchasing power of consumers.
“If you compare the YoY, the numbers are not so good,” said Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) former chairman Abdul Rehman Aizaz. He further highlighted that the industry is running at only 25% of capacity due to the dependency on parts and raw materials.
“For instance, in one month a company can fare better but can go bust the very next month,” said the former PAAPAM chairman, “Honda was doing better last month but now it has been shut for a month.”
While Pak-Suzuki Motor Company and Indus Motors have reported MoM rises of six times and 6%, respectively, in March 2023, Honda Car sales have fallen by 49% MoM to 835 units due to closure of the plant for 23 days due to CKD issues. Additionally, Hyundai sales were down 34% MoM where the Tuscon was down 46% MoM to 380 units and Sonata dropped by 40% MoM to 118 units in March 2023.
In contrast, bike sales have seen a significant decline, going down by 18% MoM and 44% YoY in March 2023. Atlas Honda recorded sales of 72,000 units, down by 16% MoM and 38% YoY. Similarly, the sales of trucks and buses were down by 53% MoM and 45% YoY to 308 units in March 2023, taking the nine months of fiscal year 2023 sales to 3,382 units, down by 32% YoY primarily due to a drop in transportation activity and a slowdown in the overall economy.
Auto sector expert Mashood Ali Khan remarked that the situation seems unlikely to improve next year if political stability is not restored soon.
Furthermore, small and medium enterprises in the auto sector and entrepreneurs are going to default on their loans as they are not getting business, he said.
Amongst Tractors, Millat Tractors Limited recorded a 3% increase MoM to 2,669 units in March 2023 while Al Ghazi Tractors Limited recorded a huge decline of 57% MoM in sales to 315 units in March-2023. This takes the total tractor industry sales to 21,233 units in nine months of FY2023, down by 49% YoY due to the floods, plant shutdown, lower consumer buying power and higher prices, said Kumar. Overall, while the recent MoM rise in auto sales is a positive sign, the industry still has a long way to go to recover from the impact of the pandemic and economic challenges.
Published in The Express Tribune, April 12th, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
-(1)1717678110-0/Kendrick-(1)-(1)1717678110-0-405x300.webp "article")
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ