Car sales witness 45 percent decline in July – November

KARACHI: Car sales witnessed 45 percent decline during first five months (July-November) 2019/2020 owing to increased prices and high cost of auto financing.

According to sales data released by Pakistan Auto Manufacturers Association (PAMA), the industry witnessed sale of 54,950 units during first five months of current fiscal year as compared with 100,643 units in corresponding months of the last fiscal year.

Analysts at Topline Securities attributed the fall to higher auto prices post rupee devaluation and higher interest rates for auto financing.

Honda Cars (HCAR) sales fell 67 percent to 7,141 units during July – November 2019/2020 as compared with 21,911 units in the same period of the last fiscal year.

Honda Cars sales 62 percent YoY during November 2019, where combined sales of City and Civic fell by 66 percent YoY, however it recorded increase of 4 percent on Month on Month (MoM). BR-V reported a decline of 24 percent YoY and 34 percent MoM.

The car sales of Indus Motors (INDU) fell by 57 percent to 11,843 units during first five months of current fiscal year as compared with 27,307 units in the same months of the last fiscal year.

Indus Motors (INDU) reported second consecutive MoM increase in volumetric sales; up by 6 percent MoM mainly due to 10 percent MoM and 8 percent MoM increase in its Corolla and Fortuner variants, respectively.

This increase in volumes is on the back of aggressive promotions, discounts & different waiver schemes offered by company in collaboration with commercial banks. However, INDU continues to report a decline on YoY basis; down by 52 percent YoY in November 2019.

The sales of Pak Suzuki Motors Company (PSMC) posted decline of 30 percent to 35,966 units during first five months of current fiscal year as compared with 51,425 units in the corresponding period of the last fiscal year.

Pak Suzuki recorded a 31 percent YoY decline in November 2019. The decline in sales was led by Wagon-R and Cultus, which is down 70 percent YoY and 41 percent YoY respectively.

Furthermore Alto has also depicted monthly decline of 27 percent YoY which is highest since its launch.

Bolan and Ravi variants are down 58 percent and 56 percent YoY, respectively. Swift sales were down by 42 percent YoY.

The analysts expect recovery in car volumes from start of 2020 as auto volumes will likely bottom out in December 2019.

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