Car Sales Witnesses Slight Recovery in November

Sales of locally assembled vehicles witnessed a slight recovery in the month of November on back of the availability of completely knocked down (CKD) parts, which led to a relatively higher production of vehicles.

Car sales including that of non-PAMA (Pakistan Automotive Manufacturers Association) members came in at around 20,000 units in November 2022, up by 35% month-on-month. However, on a year-on-year basis, sales increased by only 1%, which showed that the sector was still absorbing the shocks of economic slowdown.

According to former chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Abdul Rehman Aizaz, the restrictions imposed on the import of CKD parts should be lifted for a smooth sailing. He remarked:

“The growth is temporary until the government receives foreign loans and the policy rate drops below 12%. At present, previous bookings are supporting the industry. Once they taper off, sales will come down.”

As of the first 5 months of this fiscal year, sales of 66,458 units were recorded which is 39% less when compared to 108,635 units sold in the same period of FY22 amid escalating car prices, expensive auto financing and the low purchasing power of consumers.

The top performer was Pak Suzuki which reported a 55% month-on-month increase in sales that reached 12,400 units in November, followed by a notable increase of 38% recorded by Honda Atlas witnessing 1,973 units in the month. Indus Motors posted a 4% month-on-month decline in sales that stood at 3,242 units in November against 3,374 units in October. Sales of Hyundai-Nishat were down 9% month-on-month with Sonata witnessing a 45% decline while Elantra suffered from 25% dip in sales.

According to analysts, local assemblers have a huge backlog of orders that are supposed to be delivered, but there is an intense problem of procuring raw material. Sales will continue to drop in forthcoming period until the government allows them to import raw material, they added. Ismail Iqbal Securities’ analyst Muqeet Naeem said:

“It’s not actually the sector is picking up pace. Companies are delivering pending orders for which they have taken advances. Once those cars are delivered, sales will re-continue its downward trajectory.”

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