Locally assembled car sales improve ahead of general elections

March sales rise 5% driven in part by import restrictions.

KARACHI:

Sales of locally assembled vehicles in March improved to 13,344 units, a 5.3% increase over February driven mainly by pre-election buying and declining inventory of imported used vehicles following enforcement of import restrictions. In February, 12,628 vehicles were sold.

In March, sales of light commercial vehicles (LCVs) surged 37% month-on-month to 1,763 units, powered by the newly launched Toyota Fortuner. However, passenger car sales edged up only 2% to 11,581 units, according to data released on Wednesday.

Summit Capital Limited analyst Sarfaraz Abbasi commented that the automobile industry must be looking forward to the framing of a fresh policy by the upcoming government as it had taken a heavy battering in the last two years because of huge influx of used vehicles.

“Apparently, the future scenario for the domestic auto industry looks gloomy unless the government comes up with a consistent policy,” he said.

Sales of locally assembled vehicles (including cars, vans and jeeps) dropped 25% to 96,326 units in nine months compared to 128,567 units in the same period of last year.

Increased arrival of used imported cars in the first half of FY13, production of Alto and Coure, considered non-complaint with Euro-II emission standards, coming to a halt and closure of taxi scheme were the reasons behind the subdued sales, said Topline Securities in a research note.

Pak Suzuki Motor Company, the market leader, sold 55,428 vehicles in nine months, a 32% decline over 81,360 units sold in the same period last year. On a monthly basis, its sales remained stable at 7,100 vehicles in March against 7,000 units in February.

Indus Motor’s sales went down 34% to 25,829 vehicles in July-March FY13 against 38,858 units in the same period last year. The decline came mainly as a result of a 32% drop in sales of Corolla to 22,346 units and discontinuation of Coure.

However, on monthly basis, Indus Motor’s sales rose 11% to 3,979 units in March against 3,591 units in February. Although Corolla sales fell 2% month-on-month to 3,284 units, the growth came mainly on the back of demand for light commercial vehicles.

In the first month of its launch, Indus sold 228 Toyota Fortuner and demand for Hilux soared 86% month-on-month to 467 units in March.

“With restrictions on import of used vehicles coming into effect coupled with expectations of strong buying before upcoming elections, we foresee a decent growth in local car sales in coming months,” commented Topline Securities.

Published in The Express Tribune, April 11^th, 2013.

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