Car sales plunge by 75 percent in May

Car sales plunge by 75 percent in May

KARACHI: The sales of locally manufactured cars have posted a massive decline of 75 percent in May 2020 due to closure of business operations of all major car assemblers during the month.

According to data released by Pakistan Automobile Manufacturers Association (PAMA), the sales of car industry were at 4,473 units in May 2020 as compared with 17,781 in the same months of the last year.

Analysts at Topline Research said that the decline in sales was mainly due to the closure of business operations of all major car assemblers, which resulted in no invoicing of cars for the majority of the month.

The car sales also witnessed 54 percent decline to 102,137 units during July – May 2019/2020 as compared with 222,167 units in the corresponding period of the last year.

The highest decline was recorded by Honda Car (HCAR) as its units sales were down by 89 percent YoY in May 2020, followed by Indus Motors (INDU) and Pak Suzuki (PSMC) with declines of 88 percent YoY and 64 percent YoY, respectively.

In 11MFY20 car sales have declined by 54 percent YoY. HCAR sales are down by 65 percent YoY, followed by INDU and PSMC with declines of 57 percent YoY and 49 percent YoY, respectively.

Atlas Honda (ATLH) recorded motorbike sales of 12,106 units, down by 88 percent YoY. In 11MFY20, ATLH sales are down by 24 percent YoY.

Tractor sales are down by 49 percent YoY. Al Ghazi Tractors (AGTL) reported a decline of 89 percent YoY, while Millat Tractors (MTL) sales have declined by 26 percent YoY (+70 percentMoM).

The official notification pertaining to announced subsidy of Rs2.5 billion on GST for tractors remains pending, which has created uncertainty amongst the buyers.

The analysts expect higher sales for the month of June-2020 as restrictions imposed by the government has been eased significantly compared to the outgoing month