Car sales jump 50 per cent in fiscal 2009-10

KARACHI: Car sales jumped 50 per cent in fiscal 2009-10 on the back of gradual economic recovery, improved auto financing schemes and strong demand from rural areas.

Sales increased to 123,957 units in FY10 against 82,844 units in the same period last year, according to data released by Pakistan Automotive Manufacturers Association.

Strong demand from rural areas was attributed to better profit margins in agriculture, said Invest Cap automobile analyst Abdul Azim.

“Fiscal 2009 had been a dismal year for local auto manufacturers as volumes fell by 47 per cent to a six-year low,” said JS Global Capital analyst Atif Zafar.

Indus Motor recorded its highest-ever monthly sales of 5,793 units in June, said Zafar.

Sales of automobiles - which include cars, jeeps and light commercial vehicles - rose to a six-year high of 123,957 units in fiscal 2010, he said.

Indus Motor volumes at new high

Indus Motor outperformed the industry by six per cent during the year as its volumes increased by 49 per cent to a record 50,823 units.

“The increase in sales has been driven by the new model of Corolla launched in August 2009 and last year’s low base effect with the phasing out of the previous Corolla model,” said Zafar.

The company’s market share improved to 35.9 per cent from 34.4 per cent last year.

Government buying Corollas for new appointees and rural brand loyalty with Corolla keep sales of the car going, said Azim.

Market leader grows 46%

Pak Suzuki also registered an impressive growth of 46 per cent in fiscal 2010, rising to 73,993 units.

Suzuki was the primary beneficiary of improvement in auto financing schemes because of a stronger correlation with its lower end products, said Zafar.

However, the company’s newly launched product ‘Swift’ (1,300cc hatchback) failed to post impressive volumes as only 2,353 units have been sold since the car was launched in January 2010, Zafar added.

Suzuki retained its market leader status with a share of 52.2 per cent compared to 50.9 per cent last year.

Honda witnessed an increase of 27 per cent while sales of Dewan Motors declined 40 per cent.

Honda’s slow growth is because of its car prices which are marginally higher than competitors, explained Azim.

Published in The Express Tribune, July 13^th, 2010.