Car sales fall 32% in July
Sales have fallen 31.6 per cent in July as prices rose after the government increased the GST to 17 per cent.
KARACHI:
Car sales have fallen 31.6 per cent in July as prices rose after the government increased the General Sales Tax (GST) to 17 per cent.
Sales decreased to 9,796 units in July compared with the 14,320 units sold in June, according to data released by Pakistan Automotive Manufacturers Association (Pama) on Wednesday.
The government in the federal budget increased GST to 17 per cent, a rise of one per cent.
“The trend is the same every year,” commented Topline Securities analyst, Furqan Punjani.
“Dealers do pre-buying in June ahead of the annual budget which tends to announce measures that increase the car prices,” said Punjani. This inflates the car sales figure in June and deflates the numbers in July, he pointed out.
Indus Motors sold the most number of cars in July, with Toyota Corolla registering 92 per cent of the 4,821 units sold by the company.
An analyst highlighted that the government usually purchases Corollas for new appointees and the rural brand loyalty of the vehicle keeps sales of the car going.
Meanwhile, the production of cars went up by about five per cent from 12,072 units to 12,647 units over the same period.
Market leader sags 48%
Pak Suzuki, the market leader, witnessed a 48 per cent decline in sales with 3,703 units sold in July compared with 7,211 in the preceding month. Sales of the company’s newly launched product ‘Swift’, the 1300CC hatchback, fell to an all-time low of 195 units since its launch in January this year.
“The trend is expected to continue in the near future as rural demand is likely to fall with floods damaging the crops and cutting farmers’ profits,” said Abdul Azim, an automobile sector analyst at Invest Cap.
Increase in the age limit of imported cars also remains a threat for the sales of the local car makers, he added.
The commerce ministry proposed on Saturday that the age limit for the import of cars be increased from three years to five years. The proposal will be tabled before Prime Minister Yousaf Raza Gilani and he will take the final decision in this regard.
Honda sales also fell by 35 per cent on a monthly basis to stand at 1,728 units.
However, car sales have improved 14.4 per cent when compared against sales of 8,560 units in July 2009. Similarly production was also up by 45 per cent in this July compared to the month of the previous year.
Truck and tanker sales shift down a gear
Slowdown was also witnessed in the demand for trucks during the month of July. Only 234 trucks were sold nationwide, virtually half of the 448 units sold in June.
Similarly, production was down by over 12 per cent to 304 units from 346 units manufactured in June.
Tractor sales were down to 5,468 units in July against 7,135 units sold in June.
Meanwhile, sales increased 36 per cent compared to the 4,033 units sold in the same month last year.
Pama data also revealed that 4,053 trucks and buses, 121,647 cars and 71,607 tractors were manufactured in the outgoing financial year that ended on June 30.
During the last year, total car sales amounted to 123,957 units while 71,512 tractors and 4,277 trucks and buses were also sold. Manufacturing of motorcycles and three-wheelers stood at 736,861 units during previous financial year while sales in the same category amounted to 737,768 units.
Published in The Express Tribune, August 12th, 2010.
Car sales have fallen 31.6 per cent in July as prices rose after the government increased the General Sales Tax (GST) to 17 per cent.
Sales decreased to 9,796 units in July compared with the 14,320 units sold in June, according to data released by Pakistan Automotive Manufacturers Association (Pama) on Wednesday.
The government in the federal budget increased GST to 17 per cent, a rise of one per cent.
“The trend is the same every year,” commented Topline Securities analyst, Furqan Punjani.
“Dealers do pre-buying in June ahead of the annual budget which tends to announce measures that increase the car prices,” said Punjani. This inflates the car sales figure in June and deflates the numbers in July, he pointed out.
Indus Motors sold the most number of cars in July, with Toyota Corolla registering 92 per cent of the 4,821 units sold by the company.
An analyst highlighted that the government usually purchases Corollas for new appointees and the rural brand loyalty of the vehicle keeps sales of the car going.
Meanwhile, the production of cars went up by about five per cent from 12,072 units to 12,647 units over the same period.
Market leader sags 48%
Pak Suzuki, the market leader, witnessed a 48 per cent decline in sales with 3,703 units sold in July compared with 7,211 in the preceding month. Sales of the company’s newly launched product ‘Swift’, the 1300CC hatchback, fell to an all-time low of 195 units since its launch in January this year.
“The trend is expected to continue in the near future as rural demand is likely to fall with floods damaging the crops and cutting farmers’ profits,” said Abdul Azim, an automobile sector analyst at Invest Cap.
Increase in the age limit of imported cars also remains a threat for the sales of the local car makers, he added.
The commerce ministry proposed on Saturday that the age limit for the import of cars be increased from three years to five years. The proposal will be tabled before Prime Minister Yousaf Raza Gilani and he will take the final decision in this regard.
Honda sales also fell by 35 per cent on a monthly basis to stand at 1,728 units.
However, car sales have improved 14.4 per cent when compared against sales of 8,560 units in July 2009. Similarly production was also up by 45 per cent in this July compared to the month of the previous year.
Truck and tanker sales shift down a gear
Slowdown was also witnessed in the demand for trucks during the month of July. Only 234 trucks were sold nationwide, virtually half of the 448 units sold in June.
Similarly, production was down by over 12 per cent to 304 units from 346 units manufactured in June.
Tractor sales were down to 5,468 units in July against 7,135 units sold in June.
Meanwhile, sales increased 36 per cent compared to the 4,033 units sold in the same month last year.
Pama data also revealed that 4,053 trucks and buses, 121,647 cars and 71,607 tractors were manufactured in the outgoing financial year that ended on June 30.
During the last year, total car sales amounted to 123,957 units while 71,512 tractors and 4,277 trucks and buses were also sold. Manufacturing of motorcycles and three-wheelers stood at 736,861 units during previous financial year while sales in the same category amounted to 737,768 units.
Published in The Express Tribune, August 12th, 2010.