Slowing down: Car sales hit speed bump in July, may pick up later
Monthly demand hits 67-month low as tax burden mounts.
KARACHI:
Domestic auto assemblers sold 6,948 units including light commercial vehicles, vans and jeeps in July this year, down 34% from the corresponding month of previous year when 10,579 units were sold, shows data released on Tuesday.
Sales were even worse when compared with the previous month as they dropped 42%. In June, the number of vehicles sold was 12,081. Sales hit a 67-month low in July.
“The decline in sales was expected in July. However, we see an improvement in coming months,” said research house Topline Securities in a report.
The sales dropped following an abnormally high demand in June before the end of previous fiscal year on 30th of the month because of increase in advance motor vehicle tax and imposition of advance income tax on the transfer of motor vehicles in the federal budget for 2014-15.
This increase in the tax and the new levy came into force from July – the beginning of the new fiscal year.
Other factors that had their share in the weak demand included expectations about the arrival of new Toyota Corolla model, reduced trading activity due to Ramazan and a long Eid break.
According to the breakdown, sales of Pak Suzuki Motor Company – the country’s largest carmaker with over 50% market share – fell to 4,317 units in July, down 24% against 5,697 units in July 2013. Month-on-month, sales dived 44% compared to 7,742 units in June.
The company recorded a steep decline of 50% in Mehran sales while demand for Ravi, Bolan and Wagon R dropped 46%, 33% and 54%, respectively.
Indus Motor – the second largest carmaker – sold 1,106 units in July, 62% lower year-on-year and down 26% month-on-month. In June, Indus had sold 1,499 units.
The major decline was recorded in the company’s flagship car, Toyota Corolla, as its sales stood at 673 units compared to 970 units in the previous month. Hilux sales also dipped to 363 units as opposed to 525 units in June.
Published in The Express Tribune, August 13th, 2014.
Domestic auto assemblers sold 6,948 units including light commercial vehicles, vans and jeeps in July this year, down 34% from the corresponding month of previous year when 10,579 units were sold, shows data released on Tuesday.
Sales were even worse when compared with the previous month as they dropped 42%. In June, the number of vehicles sold was 12,081. Sales hit a 67-month low in July.
“The decline in sales was expected in July. However, we see an improvement in coming months,” said research house Topline Securities in a report.
The sales dropped following an abnormally high demand in June before the end of previous fiscal year on 30th of the month because of increase in advance motor vehicle tax and imposition of advance income tax on the transfer of motor vehicles in the federal budget for 2014-15.
This increase in the tax and the new levy came into force from July – the beginning of the new fiscal year.
Other factors that had their share in the weak demand included expectations about the arrival of new Toyota Corolla model, reduced trading activity due to Ramazan and a long Eid break.
According to the breakdown, sales of Pak Suzuki Motor Company – the country’s largest carmaker with over 50% market share – fell to 4,317 units in July, down 24% against 5,697 units in July 2013. Month-on-month, sales dived 44% compared to 7,742 units in June.
The company recorded a steep decline of 50% in Mehran sales while demand for Ravi, Bolan and Wagon R dropped 46%, 33% and 54%, respectively.
Indus Motor – the second largest carmaker – sold 1,106 units in July, 62% lower year-on-year and down 26% month-on-month. In June, Indus had sold 1,499 units.
The major decline was recorded in the company’s flagship car, Toyota Corolla, as its sales stood at 673 units compared to 970 units in the previous month. Hilux sales also dipped to 363 units as opposed to 525 units in June.
Published in The Express Tribune, August 13th, 2014.