Car sales register remarkable growth

KARACHI: Car sales shot up to 19,625 units in August, compared with the 9,796 units sold in July, according to data released by the Pakistan Automotive Manufacturers Association (Pama). Meanwhile, production of cars stood at 21,692 units, compared with 12,647 units in the preceding month.

The data revealed that the sales of Pakistan Suzuki Motor Company increased by 44 per cent and Honda’s increased by about 12 per cent. Meanwhile, Indus Motors’ sales fell by 33 per cent on a monthly basis in August.

During the same period, sales of trucks also increased significantly to 430 from 234 units sold in July. Hino, Nissan, Master and Isuzu, all posted increases in production. Total trucks manufactured in August stood at 522 units against 304 units produced in the preceding month.

Tractor sales were recorded at 9,105 units in the outgoing month, up more than 66 per cent.

Pama data also reported that the production and sales of motorcycles and three-wheelers combined stood at 126,638 and 124,357 units, respectively. This represented an increase of 14.43 per cent and 14.45 per cent, respectively, when compared with July.

Auto sector analysts expect this growth to slow down in the coming months. “The rupee has depreciated significantly against the US dollar and Yen,” pointed out Abdul Azeem, an analyst at InvestCap. “If this trend continues, automobile prices will rise, making it difficult for people to afford them”.

He explained that the increase in sales of tractors and trucks can be partially attributed to an increase in the incomes of farmers and other rural populations.

However, he warned that the floods have diminished the purchasing power of many people and this will negatively impact sales, particularly of tractors in coming months.

Meanwhile, the government is considering proposals for relaxation in rules regarding the import of foreign cars that would allow the import of cars manufactured up to five years ago.  Experts point out that this could further impact sales of local car manufacturers negatively.

Published in The Express Tribune, September 10^th, 2010.