Pakistan Car Sales Plunge by 50% in Jul-Nov FY24

Pakistan Car Sales Plunge by 50% in Jul-Nov FY24

Karachi, December 11, 2023 – Pakistan’s automotive industry is grappling with a substantial 50 percent decline in car sales during the initial five months of the fiscal year 2023-2024, signaling a challenging economic landscape for the country.

According to data released by the Pakistan Auto Manufacturers Association (PAMA) on Monday, car sales plummeted from 67,104 units in the corresponding months of the previous fiscal year to a mere 33,638 units during the July to November period of the current fiscal year.

In November 2023, the auto industry experienced a 5 percent Month on Month (MoM) increase with 6,475 units sold. However, this seemingly positive trend is overshadowed by a staggering 65 percent Year on Year (YoY) decline in sales, highlighting the severity of the situation.

Analysts at Arif Habib Limited attribute the MoM increase to a low base effect, while the YoY decline is linked to elevated car prices and diminished consumer affordability. Factors such as a decline in overall consumer purchasing power, an unprecedented surge in inflation, Pakistani Rupee (PKR) depreciation, and higher interest rates have collectively contributed to a weakened demand for new passenger vehicles.

Despite price cuts announced in October 2023, they have failed to stimulate a recovery in auto sales volumes. Economic challenges persistently affect consumer sentiment, presenting a notable obstacle to the revival of the automotive market.

In specific segments, the 1,300cc and above category experienced a 29 percent MoM surge, while the 1,000cc segment saw a 39 percent MoM increase. However, the below 1000cc segment witnessed a 23 percent MoM decline, totaling 2,113 units.

Indus Motors (INDU) reported a 9 percent MoM decline in volumetric sales in November 2023, recording 956 units. Corolla and Yaris sales dropped by 13 percent MoM, indicating a struggle to attract customers despite a 6 percent price cut across different passenger car variants at the end of October 2023.

Pak Suzuki (PSMC) experienced an 8 percent MoM decline in overall sales in November 2023.

On the contrary, Honda Atlas Cars (HCAR) witnessed a remarkable 121 percent MoM increase in volumetric sales. Civic/City sales settled at 912 units, up by 141 percent MoM.

Bike sales volumes witnessed a 13 percent MoM and 21 percent YoY decline in November 2023. Sales volumes of Atlas Honda (ATLH) reached 76,042 units, down 16 percent MoM and 18 percent YoY.

Tractor sales, on the other hand, suppressed by 33 percent MoM in November 2023. AGTL experienced a sharp 68 percent MoM decline, while MTL sales arrived at 2,809 units, shrinking by 6 percent MoM. The tractor sales augmented due to better farmer income amid bumper crops this year, the analysts added.