Karachi, July 11, 2023 – Pakistan has reported a slump of 55 percent in sales of locally assembled cars during fiscal year 2022-23.
According to data released by Pakistan Auto Manufacturers Association (PAMA) on Tuesday, the car sales recorded at 126,879 units during fiscal year 2022-23 as compared with 279,267 units in the preceding fiscal year.
Analysts at Topline Securities attributed the decline to a number of factors, including:
The non-availability of Completely Knocked Down (CKDs), which are the parts that are imported from other countries and assembled in Pakistan to make a car.
Escalating car prices, which have been driven by a number of factors, including the depreciation of the Pakistani rupee, the increase in taxes on imported cars, and the rise in the cost of raw materials.
Expensive auto financing, which has made it difficult for people to afford to buy a car.
Low purchasing power of consumers, which has been declining due to the economic slowdown.
The analysts said that the decline in car sales is likely to continue in the coming months. They said that the government needs to take steps to address the factors that are causing the decline in car sales.
Here is a detailed breakdown of car sales in Pakistan by brand:
Honda Atlas Car (HCAR) recorded the highest increase in sales in June 2023, with sales up 253 percent month-on-month (MoM) to 307 units. This was due to the low base of last month and the availability of CKD parts. HCAR’s sales for the full year FY23 were down 57 percent YoY to 16,879 units.
Pak Suzuki Motor Company (PSMC) recorded a 2 percent MoM increase in sales in June 2023 to 3,009 units. This was led by an increase in sales of the Bolan (+67 percent MoM) and Wagon-R (+11 percent MoM). PSMC’s sales for the full year FY23 were down 57 percent YoY to 65,364 units.
Indus Motors (INDU) recorded a 7 percent MoM increase in sales in June 2023 to 1,846 units. This was compared to 1,718 units in May 2023. INDU’s sales for the full year FY23 were down 58 percent YoY to 31,104 units.
Hyundai also saw an increase in sales in June 2023, up 11 percent MoM to 313 units. This was driven by the Tuscon (+61 percent MoM) and Elantra (+28 percent MoM). Hyundai’s sales for the full year FY23 were down 48 percent YoY to 10,262 units.
The decline in car sales is having a negative impact on the auto industry in Pakistan. The industry employs millions of people and contributes billions of rupees to the economy. The decline in sales is also leading to job losses in the industry.
The government needs to take steps to address the factors that are causing the decline in car sales. These steps include: Facilitating the import of CKDs; Reducing taxes on imported cars; Making auto financing more affordable; Promoting economic growth, which will lead to an increase in purchasing power.
The government needs to take action to address the factors that are causing the decline in car sales. Otherwise, the auto industry in Pakistan will continue to suffer.