Pakistan's Automobile Market Experiences Monthly Surge Amidst Ongoing Challenges
Industry witnessed a 10% month-on-month increase in car sales in September, with 8,312 units sold, thanks to improved access to raw materials and relaxed import regulations.
Karobar
In a recent report, the Pakistan Automotive Manufacturers Association (PAMA) unveiled an exciting trend in the country's car sales, which showcased a notable 10% month-on-month (MoM) increase in September. A total of 8,312 units were sold, suggesting a short-term boost driven by improved access to essential raw materials.
This surge in car sales is part of an ongoing trend that kicked off in August, with a remarkable 49% increase in sales. According to industry expert Waqas Ghani, Deputy Head of Research at JS Research, this surge can be largely attributed to improved access to raw materials and the relaxation of regulations surrounding Letters of Credit (LCs) for imports, which greatly benefited the automobile manufacturing industry.
Yet, when we zoom out to look at year-on-year statistics, a different story emerges. The same period in the previous year witnessed a substantial 26% decrease in car sales, highlighting persistent challenges within the local automobile industry.
The Bumps in the Road:
The year-on-year decline can be attributed to a combination of factors, including elevated car prices, expensive auto financing, and increased taxation. Sunny Kumar, Deputy Head of Research, emphasized that while the monthly increase is a positive sign, the long-term outlook remains uncertain. Escalating car prices, costly auto financing, and low consumer purchasing power are identified as the key factors contributing to the year-on-year sales decline.
Taking a closer look at specific car manufacturers, Honda Atlas Car stands out with an impressive 99% MoM increase, reaching 1,342 units sold in September. Pak Suzuki, on the other hand, recorded a 1% MoM decline, with a noticeable 8% drop in Alto sales. However, other variants, such as Ravi, Bolan, and Cultus, experienced significant increases of 58%, 38%, and 9% respectively, while Swift and Wagon-R sales remained relatively stable.
Hyundai's Rise:
Hyundai's sales increased by 5% MoM, partly due to a remarkable 48% surge in Porter sales. Indus Motor, responsible for assembling and selling Toyota vehicles in Pakistan, reported a 3% increase in sales compared to August, with Fortuner and Hilux experiencing a noteworthy 27% increase on a monthly basis.
Tractors and Trucks:
The tractor industry witnessed substantial growth, with Al Ghazi Tractors (AGM) and Millat Tractors (MTL) recording remarkable MoM increases of 50% and 29%. This contributed to a striking 64% YoY growth in total tractor industry sales in the first quarter of fiscal year 2024, largely due to a low base from the previous year due to floods. In contrast, trucks and buses sales increased by 11% on a monthly basis but experienced a significant 51% YoY decline to 185 units.
Two-Wheelers on the Rise:
On a positive note, Pakistan's motorcycle sales rose by 21% MoM and 8% YoY in September. Atlas Honda (ATLH) led the way, recording sales of 95,056 units, marking a 27% MoM and 12% YoY increase.
Pakistan's automotive industry is experiencing an interesting journey, with both short-term surges and long-term challenges. It remains to be seen how the industry will navigate these twists and turns in the road ahead.
