Car sales up 6% in September

10,400 cars sold in September, up six per cent when compared with sales for August.

KARACHI: More than 10,400 cars were sold in the month of September, up six per cent when compared with sales for the previous month (August). (Click here to view infographic on car sales figures)

Demand for cars remains strong despite volatile market conditions on the back of major flooding in the country. However, observers are still sceptical about the future of the automobile industry in Pakistan. “The growth is not encouraging as September’s sales figures are still seven per cent lower than average monthly sales for this year,” commented Furqan Punjani, analyst at Topline Securities.

Car sales also increased by 12 per cent to 30,030 units in the first quarter of the current fiscal year when compared with the same period last year, according to data released by the Pakistan Automotive Manufacturers Association (Pama) on Tuesday.

Punjani mainly attributed the growth in car sales to Indus Motor Company and Pak Suzuki, the major players in the market for passenger cars but warned that growth in Indus Motor sales may slow down as figures have already touched optimum levels. Meanwhile, sales of Pak Suzuki are expected to rise by 10 per cent on a yearly basis.

Experts contend that another increase in interest rates appears likely in coming months and this could have a negative impact on demand for cars.

It is interesting to note that auto sales in next-door China also picked up pace in September. Sales in the world’s biggest market for automobiles rose to 1.56 million units – marking an increase of 16.9 per cent from September last year, according to the China Association of Automobile Manufacturers. Sales were largely driven by passenger vehicles with 1.21 million units sold.

It’s not just about cars

“I don’t understand why everyone focuses on just cars,” commented Abdul Waheed Khan from Pama. He highlighted that while car sales were picking up, trucks and buses were not performing as well.

Although the data shows that production of trucks and buses improved by 28 per cent month-on-month to 326 units and sales jumped by 42 per cent during the same period, first quarter’s sales in the overall category have recorded a five per cent decline compared with the same period last year.

A similar comparison shows that the production of trucks and buses during the quarter went up by less than one per cent. The production of buses, 133 for the quarter, seems to have taken a major hit as it has been slashed by more than 28 per cent on a yearly basis.

“These figures are really important as they are a reflection of the country’s public transport sector,” said Khan. “What would be the state of local production if the import of used trucks and buses went up or taxes were imposed?” he concluded.

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