Karachi, November 13, 2023 – Pakistan’s automotive industry is grappling with a significant setback as the country witnessed a sharp 44 percent decline in car sales during the first four months of the fiscal year 2023-24 (July to October).
According to data released by the Pakistan Auto Manufacturers Association (PAMA), car sales plummeted from 48,573 units in the corresponding period of the last fiscal year to a mere 27,163 units.
In a detailed breakdown, PAMA reported that October 2023 alone saw a 26 percent Month-on-Month (MoM) decrease, with car sales totaling 6,180 units. The Year-on-Year (YoY) comparison is even more striking, revealing a staggering 54 percent drop. The figures, inclusive of Non-PAMA members, reached 7,000 units, reflecting a 26 percent MoM decline and a 53 percent YoY fall.
Topline Securities Limited analysts have pointed to disruptions in the supply chain as a primary factor contributing to the MoM decline. They also highlighted lower demand as another significant factor. However, the YoY decrease is attributed to a combination of factors, including escalating car prices, expensive auto financing, and the weakened purchasing power of consumers.
The worst-hit among automakers were Honda Car (HCAR) and Indus Motors (INDU), experiencing MoM sales declines of 66 percent and 34 percent, respectively. The shutdown of their plants due to inventory shortages exacerbated the situation. Pak Suzuki (PSMC) recorded sales of 3,810 units in October 2023, down 10 percent MoM.
Similarly, Hyundai faced a MoM sales decline of 54 percent, with overall sales reaching 377 units in October 2023. However, the newly launched Hyundai Santa FE managed to record sales of 175 units during the same month.
Moving to the tractor industry, Al Ghazi Tractors (AGTL) and Millat Tractors (MTL) experienced MoM declines of 5 percent and 4 percent, respectively, in October 2023. Despite this, the total tractor industry sales for the first four months of FY24 reached 17,296 units, marking an 87 percent YoY increase, mainly attributed to the low base of the previous year due to floods.
In the trucks and buses segment, sales decreased by 1 percent MoM and a substantial 44 percent YoY, amounting to 183 units in October 2023. The cumulative industry sales for 4MFY24 stood at 730 units, reflecting a 45 percent YoY decline.
Even the two-wheeler market did not escape the downturn, with bike sales down 5 percent MoM and 11 percent YoY in October 2023. Atlas Honda (ATLH), a prominent player in the motorcycle segment, recorded sales of 90,000 units, marking a 5 percent MoM and YoY decrease. The total industry sales for the first four months of FY24 reached 371,000 units, indicating a 10 percent YoY decline attributed to higher bike prices and the constrained purchasing power of consumers.
The challenges faced by Pakistan’s automotive industry are multifaceted, requiring a comprehensive approach from manufacturers, policymakers, and other stakeholders to navigate through this period of economic uncertainty and address the various factors contributing to the decline in sales.
