Car sales drop in November as buyers hold out for better deals

Analysts expect trend to continue during the current month.

KARACHI: Car sales dropped in November as higher prices continued to drive away prospective buyers. Data released by the Pakistan Automotive Manufacturers Association on Saturday showed that during the outgoing month, car sales tallied to 10,259 units against the 11,911 units sold in October.

Similarly, production also fell by 1,668 units to 10,500 units in November.

“All major manufacturers have increased prices, making it more difficult for people to afford vehicles,” explained auto sector analyst Abdul Azeem. “The recent floods have also negatively impacted purchasing power, especially for those living in areas affected by flood or those employed in affected industries.”

Meanwhile, sales of trucks and buses also fell from 289 units in October to 213 units in the outgoing month. Weaker demand compelled manufacturers to taper down production and the combined production of trucks and buses stood at 192 units, a 37 per cent drop from the previous month.

Higher prices seem to have taken a bite out of the demand for cheaper modes of transport as well. Marking a reduction of 4,841 units, 62,724 motorcycles and three-wheelers were purchased in the outgoing month.

“The impact of flood losses is still being witnessed because many of the cars and other automobiles sold in the past couple of months would actually have been booked in earlier months,” explained Topline Securities analyst Furqan Punjani. “Sales are also relatively low at the end of the calendar year as many people prefer to wait for newer models before making the purchase.”

Although the government notification regarding the relaxation in the age limit of imported used cars was made public during this week, those looking for an automobile have been putting off the purchase in hopes of a better deal.

Published in The Express Tribune, December 12^th, 2010.