Car Sales in April Render a Widening Economic Gap

Sales of locally assembled vehicles witnessed a deplorable 52% month-on-month and nearly 80% year-on-year decline in April 2023 as escalating political and economic uncertainty coupled with higher pricing, a reduction in auto finance amid rising interest rates, high fuel prices, plant closures due to part shortages brought on by import restrictions, and delays in the delivery of vehicles to customers continue to take a toll on the auto industry.

Only 4,463 units were collectively sold by PAMA (Pakistan Automobile Manufacturers Association) member companies in April. It was the lowest monthly sales figure since May 2020 Covid-19 lockdowns. Whereas in the first 10 months of the current fiscal year, sales were down by 50% to just 114,868 units compared to 227,995 units sold during the same period of last fiscal year.

Related: Buying a New Car isn’t Anyone’s Piece of Cake

However, there is an interesting thing to come out of this equation— the widening economic divide. While sales of every locally assembled vehicle continue to suffer, those pricier cars with a value exceeding well above Rs 1 crore have witnessed a healthy improvement in sales.

Vehicles March 2023 April 2023 MoM Difference
Pak Suzuki
Cultus 475 177 -63%
Alto 2,542 820 -68%
Wagon R 489 99 -80%
Bolan 782 163 -79%
Swift 877 145 -83%
Toyota Indus
Corolla and Yaris 1,119 1,007 -10%
Fortuner and Hilux 793 941 19%
Honda Atlas
Civic and City 611 159 -74%
HR-V & BR-V 224 48 -79%
Hyundai Nishat
Tucson 380 315 -17%
Elantra 188 119 -37%
Sonata 118 155 31%

With 941 units sold in April compared to 793 in March, sales of Toyota Hilux and Fortuner witnessed a 19% month-on-month improvement in sales. Whereas the D-segment Hyundai Sonata saloon saw a 31% surge in sales with 155 units sold during April.

Sonata pk1

Other non-PAMA assemblers are also expected to be facing similar results as Kia which has been generally reluctant to increase the prices of its slowest-selling Sorento recently jacked up its prices along with the Carnival luxury MPV indicating a sizeable demand for these super-expensive vehicles, both of which now cost over Rs 1 crore.

Related: Why Pakistan Usually Get Globally-Retired Cars?

As the gradient narrows fast, the middle-income group is steadily falling into the low-income group as the rich are getting richer while the poor are getting poorer. Prices of new cars have risen by 35% or more within the last few months, but those rich with wealth continue to select their preferred vehicle—and wait several months for delivery (not to mention that compared to the previous fiscal year, the sales of expensive SUVs and 4x4s have nearly doubled) —while those feeling the pinch of lower purchasing power continue to downgrade a model or two.

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