In April, sales of cars, light-duty vehicles, jeeps, and vans decreased by more than 80% year over year (YoY) to 4,463 units due to escalating political and economic uncertainty.
In the first ten months of the current fiscal year, sales decreased by 50% to 114,868 units from 227,995 units during the same period of the last fiscal year. Sales decreased by 52% month over month (MoM) in April. Since May 2020 Covid-19 lockout, it was the lowest monthly sales figure for the aforementioned categories.
The primary causes of the ongoing decline in auto sales were higher pricing, a reduction in auto finance as a result of high and rising interest rates, high petrol prices, plant closures due to part shortages brought on by import restrictions, and delays in the delivery of vehicles to customers.
According to the data from the Pakistan Automotive Manufacturers Association (PAMA), the volumetric sales of Pak Suzuki and Honda Atlas, which had decreased by 74% and 75% MoM, respectively, were particularly indicative of the sales slump.
Sales of the Toyota Corolla and Yaris (combined) in April were 1,007 units, a decrease of 10% month over month and 76% year over year. Both these cars suffered from a 64% decline to 17,001 units in the July-April period of FY23. Sales of Honda Civic & City (combined) nosedived by 74% in April to 159 units from 611 units in March while it contracted by 93% if compared with 2,265 units in April 2022. Total sales of these vehicles in 10MFY23 witnessed a drop of 57% to 12,540 units from 29,095 units sold in the corresponding period of the previous fiscal year.
A further significant reduction of 71% MoM was seen in the below 1,300cc segment, which was primarily caused by sharp drops in the sales of the Swift, Cultus, and Waggon R models, whose monthly sales fell by 83%, 63%, and 80%, respectively. Sales in the sub-1000cc class likewise had a severe decline, falling by 70% MoM in April 2023, with a total of just 983 units sold.
Industry players will actively monitor market circumstances and look for ways to boost demand as Pakistan’s domestic auto sales fall to a three-year low. It will be essential to address the problems caused by high-interest rates, car prices, and consumer affordability if we are to revive our country’s automotive industry and support economic growth.
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