Year-end dip: 7.5% is the month-on-month decline in car sales in December 2013, as customers preferred to wait for newer model next year.
PHOTO: FILE
Local car sales (including light commercial vehicles (LCVs), Vans and Jeeps) reached 61,252 units during the first half of fiscal year 2013-14 (1HFY14), up 6.5% compared to 57,540 units during the same period of the previous year.
However, in December 2013, sales dipped to 8,868 units, showing a decline of 7.5% month on month (MoM). During November 2013, local car sales stood at 9,588 units, 3.7% down as compared to 9,955 units in October 2013.
Analysts say the drop in December sales was due to the year-end phenomenon, as every year buyer prefers to buy the newer model from January 1.
“Car sales in the first six months of the fiscal year usually remain dull but jump in the second half of the year,” said JS Global Capital analyst Atif Zafar. “So I expect better sales in the remaining six months of the current fiscal year.”
As an example, Zafar said that if 10 cars are sold in the first six months (Jul-Dec), 15 are sold in the second (Jan-Jun).
However, he said that the government could increase the age-limit for used car imports from the current three years to five in the upcoming Auto Industry Development Plan 2 (AIDP 2), which may hit the sales of locally-produced cars.
“Local car sales declined continuously from October to December 2013,” an official of a car company commented. “But it was not shocking for us as we know car sales usually drop in the last months of each year mainly because of the year-end phenomenon.”
On a year on year (YoY) basis, car sales improved by 5% compared to 8,448 units in December 2012.
Among individual companies, Pak Suzuki – the country’s largest carmaker with 55% market share – saw sales improve by 3.4% to 35,492 units in 1HFY14 against 34,324 units in the same period last year. In December 2013 alone, sales remained stable at 5,981 units as against 5,989 units in November 2013.
Sales of Indus Motor –makers of Toyota Corolla – also improved by 3.3% to 15,179 units in 1HFY14 compared to 14,699 units in 1HFY13. On a monthly basis, Indus’ sales declined by 9.2% to 1,982 units in December 2013 but were up 26% YoY.
Honda Atlas Cars saw sales surge by 20.5% YoY to 9,989 units in 1HFY14. During December 2013, sales of Honda Cars significantly dropped to 655 units compared to 1,310 units in November 2013 and 864 units in December 2012.
“Car sales usually remain strong in second half of a fiscal year (Jan-Jun) so we expect further improvement in car sales in coming months,” a Topline Securities report said on Friday.
However, the report said the sales would not be 8% as it maintained its previous prediction that the car sales to remain between 5-8% in FY2013-14.
Published in The Express Tribune, January 11th, 2014.
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