Car Sales Drop to Lowest in More Than 2 Years

Sales of locally assembled passenger cars in Pakistan dropped to the lowest in more than 2 years as rising prices suppressed demand and import curbs hurt production even before the full impact of the devastating floods are factored in.

Sales fell 50% to just 8,980 units in August from a year ago, according to data released by Pakistan Automotive Manufacturers Association (PAMA). That’s the lowest since June 2020 when 7,325 units had been sold during the coronavirus pandemic. Sales had fell to 10,378 units in July. Adding the numbers of non-PAMA members, the sales stay around 14,000 units in August witnessing a 2% month-on-month decline.

New car sales have been cut by half during first two months (July – August) of this fiscal year owing to restrictions imposed on the import of CKD parts & assemblers observing plant shutdowns due to lack on required material in hand. According to unofficial sources, car sales are also down by 46% year-on-year amid escalating car prices, expensive auto financing, and low purchasing power of consumers. This takes 2MFY23 car sales to 23,498 units down almost 50% year-on-year from 46,656 units in 2MFY22.

Related: Car Sales Going Down, Where is Plan B?

Bear in mind, assemblers were allowed to import only 50% of their average imports over the last 4 months in Jul-2022 in order to save foreign exchange reserve. The quota was increased to 60% for August 2022 and 70% for September 2022.

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Pak Suzuki sales was down 41% month-on-month to 3,954 units in August 2022 due to plant closure amid unavailability of CKD parts. Honda Atlas recorded 29% month-on-month decline to 1,809 units in August 2022 led by decline in sales of City & Civic by 40% month-on-month. Interestingly, Indus Motors Company posted an increase of 63% month-on-month to 3,876 units in August 2022 from 2,375 units in July 2022. Whereas, Hyundai sales increased to 1,929 units in August 2022 as compared to 201 units in July 2022 led by uptick in Tuscon sales primarily due to low base.

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