The local auto industry is going through the toughest of times primarily due to the import restrictions imposed by the government since the beginning of this fiscal year.
To save the precious forex outflow, the govt decision has resulted in some form of current account surplus but has badly jolted the local assemblers which remain heavily dependent on imports despite over 3 decades of presence in the country. The import restrictions on CKD parts created a massive inventory shortfall due to which assemblers had to observe Non-Production Days (NPDs) that in turn affected the production & sales, and delivery timelines.
Related: Thousands are Laid Off by Auto Industry as Sales Reach a Record Low
The situation worsened due to outrageously rising car prices due to political and economic uncertainty, steeply declining currency value, high-interest rates, stringent auto financing conditions, and high fuel costs which pushed away most of the buyers out of the equation. As a result, in the first 10 months of the current fiscal year, sales of new automobiles decreased by 50% to 114,868 units from 227,995 units during the same period of the last fiscal year.
Sales of passenger cars, light-duty vehicles, 4x4s, and vans decreased by 52% month over month in April, while it decreased by more than 80% year over year to 4,463 units. April 2023 also saw the lowest monthly sales figure for the aforementioned categories since May 2020 Covid-19 lockout. The sales figures of two of Pakistan’s most popular cars give the clearest picture of the catastrophic situation.
Related: Alto and Corolla Emerged as Bestselling Cars of 2022 in Pakistan
Suzuki Alto and Toyota Corolla remain the top 2 bestselling cars in Pakistan. In the calendar year 2022 despite the industry starting to face a slowdown in the last 4 months of the year, Pak Suzuki was able to sell 66,427 units of Alto which is the highest-ever figure the company ever achieved in a year in terms of sales of an individual model.
This was followed by the Toyota Corolla which saw a total of 23,960 units sold during the year 2022, and although it’s almost 50% less than the sales of Corolla at its peak, the number was still the highest among the competition (sedans). This renders a monthly sales average of 5,535 units for Alto and 1,996 units for Corolla in the year 2022.
Related: Pak Suzuki in Dire Straits
Now compare this to the April 2023 sales, where Alto again topped the charts followed by the Corolla as usual. But in comparison to their sales average of 2022, Alto saw just 820 units while Corolla witnessed sales of only 740 units in April. So far during the first 4 months of this calendar year, only 3,950 units of Suzuki Alto have been sold while just 3,551 units of Toyota Corolla, rendering a deplorable 82% and 55% decline respectively.
As far as the situation appears, the current economic nightmare and the never-ending uncertainties won’t be ending anytime soon. For local auto assemblers, the summer will likely be long, difficult & daunting.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
