Automobile sales hit highest level in 4 years

[Haider53]

Tax relief and yellow cab scheme have pushed the automobile companies’ sales upward despite tough circumstances like inflows of imported cars and shortage of imported spare parts, as the industry managed to complete the financial year 2011-12 with highest selling units of 179,000 after four years.
The figures made available said that the automobile sales including cars, light commercial vehicles (LCVs) and jeeps showed growth of 22 percent in financial year 2011-12 as compared to 146,000 units in the previous financial year.
The sales are believed to be the highest annualised sales after four years as last time in 2008-09 total sales were recorded at 187,000 units by the industry. Among the individual categories, cars segment sales surged by a massive 23 percent on yearly basis to 157,000 units, whereas LCVs and Pickups segment sales picked up by 18 percent on yearly basis to 21,800 units.
The sales growth attributed to heavy purchasing of cars deferred in the month of July from June 2011 in which general sales tax (GST) was cut to 16 percent from 17 percent.
The Punjab government’s yellow cab scheme imparted a significant role to drive the industry sales growth as 20,000 units were planned to be sold out throughout the financial year. Whereas 18 percent increase in workers’ remittance that reached to $13.2 billion also contributed towards a record growth of automobile industry.
It is also believed that cars sales jumped up in June in anticipation of rise in prices before EURO II compliance.
Therefore, it has been recorded that car sales stood at 19,000 units in June, which is the highest monthly sales after almost five years. Previously the record sales of 21,000 units were witnessed in August 2007.
Analysts said that automobile sales are likely to continue upward trend in the next financial year, as the car scheme and heavy occasional purchase of passenger cars might not happen again.
It is due to the fact that more than 50,000 reconditioned cars were imported in the current financial year after the government relaxed the age of used car from three years to five years. The high inflows of imported cars not only increased the competition but impacted negatively on the growth of local automakers sales.
The auto sales have been seen on the decline as they stood at 97,000 units in the first half, while its growth was recorded at 82,000 units in the second of half of the outgoing financial year.
The State Bank of Pakistan in its recent quarterly report mentioned that automobile sales in the first three quarters of the financial year slowed down in the current year as compared with previous financial year if the sales number of cab scheme is excluded.
It also said that local automobile makers faced a difficult time during the year as the supplies of spare parts to the country were discontinued for a few months after flood hit Thailand.

Used car traders misusing import facility

The used car import facility under various schemes for Pakistanis living abroad has been misused by used car traders. Although this scheme is for overseas Pakistanis, however, the used car traders purchase the documents against a meagre amount from overseas Pakistanis and indulge in mass imports. These traders make huge profits ranging from Rs 50,000 to Rs 200,000 on the sales of these cars. The transactions are not transparent and without any contribution to the exchequer as no taxes are paid on the profits made by them. These imports are also damaging Pakistani economy as they result in drain of foreign exchange. It is interesting to note that the foreign exchange consumed in import of used cars is twice that needed for CKD operation due to considerable localisation. Also the taxes paid at import stage are fixed amount in dollars, which were determined in 2006, the yen and dollar parity has since changed from 114 yen to a dollar to 79 yen, whereas there is no change in fix taxes in the dollar. Recently, another scam of deliberately importing more than five-year-old cars has been unearthed. These traders in violation of the rules are importing more than five-year-old cars and getting them cleared through fowl means. It has also been noted that in many imported cars, spare parts are also put in these cars.

[nasir007]

Strict action should be taken on illegal import means as they benefit only a few !!

[Xplorer]

Source Dawn News Paper 13-Jul-2012

Buyers purchased 23 per cent more locally-assembled cars in 2011-2012 as compared to 2010-2011 despite increase in prices, few months’ suspension/slowdown in sales of Honda cars and Suzuki Liana coupled with discontinuation of Daihatsu Cuore’s production from May this year and rising import of used cars. Other segment of the auto sector gave a mixed performance with 18 per cent and 28 per cent decline in trucks and tractor sales followed by 0.7pc fall in two/three wheeler sales.

Sale of buses and light commercial vehicles (pick ups) rose by 18.3 and 21 per cent.

A total of 157,325 units of cars were sold in 2011-2012 as compared to 127,944 units in 2010-2012, thanks to sale of 20,000 units of Suzuki Mehran and Bolan to the Punjab government for taxi scheme, 18pc increase in workers’ remittances and rising from income.

Zeeshan Afzal at Top Line Securities said that other reasons of sales hike was June to July 2011, deferred sales on account of reduced tax structure announced in 2011-2012 and escalating fiscal deficit creating monetisation phenomena. Even consumers also lifted 16,310 units in June as compared to 14,934 units in May 2012, due to prompt buying in anticipation of rise in prices before EURO II compliance.
In 1,300cc and above category, overall sales grew by 7.64 per cent to 65,816 units as compared to 61,147 units despite 22pc fall in Honda Civic and Honda City sales. A total of 4,977 and 7,142 units of Honda Civic and Honda City were sold as compared to 6,365 and 9,121 units. Production of Honda Civic remained suspended from December 2011 to February 2011 followed by halt in City’s production from December 2011 to March 2012 owing to delay in parts and accessories supplies from flood-hit Thailand.

Much support came in high engine power cars sales from 73 per cent jump in Suzuki Swift sales to 7,040 units as compared to 4,080 units, while Toyota Corolla sales registered 12.4 per cent rise to 46,207 units as compared to 41,111 units. Suzuki Liana sales plunged by 4.26 per cent to 450 units from 470 units.

In 1,000cc, production and sales of Hyundai Santro remained zero in 2011-2012 as compared to 2010-2011, while Suzuki Cultus sales surged by 20 per cent to 13,693 units from 11,428 units. Sale of Suzuki Alto swelled by 36.5 per cent to 16,288 units in 2011-2012 from 11,932 units in 2010-2011. In 800cc and below 1,000cc, Suzuki Bolan topped with 69 per cent sales rise to 22,540 units from 13,311 units followed by Suzuki Mehran’s sales to 35,131 units from 24,119 units.

Daihatsu Cuore sales fell sharply by 36 per cent to 3,857 units from 6,007 units. A total of 609 buses (mainly Hino) were sold in 2011-2012 as compared to 515 units in 2010-2011.

Hino bus sales stood at 490 units as compared to 409 units while truck sales (Hino, Nissan, Master and Isuzu) plunged to 2,394 units from 2,942 units.

Whereas, tractor sales (Fiat and Massey Ferguson) remained flat by 28 per cent in 2011-2012 to 49,745 units as compared to 69,203 units; tractor sales faced problem as growers remained reluctant due to confusion over removal of 16pc general sales tax which was later reduced to five per cent.

[szahmad]

import of cars must be encouraged as well as parts.

[szahmad]

tax on import of old cars must be low.

[landcruiser08]

and you should be shot for suggesting such ridiculous policies

[onlyfaith]

Association on Monday, the last eleven months have shown an increase of 16 percent, with the sales of locally manufactured automobiles going up to 141,015 units 11MFY12 as compared to the121,455 that were sold during the same period of last year. While the total indigenous production of cars has also increased by 9.1 percent over the last fiscal year, it has been Pak Suzuki (PSMC) that has seen the greatest jump in sales with a 20 percent MoM increase with a reported 10,608 units sold in the last month. The primary instigator in this increase is the Punjab Governments Yellow cab scheme, where the government offered 20,000 units of Suzukis star sellers Mehran and Bolan, at a reduced rate to the unemployed youth of the province. Launched in 5 major cities of Punjab, this scheme has led to an overall year-on-year increase of 39 percent and 54 percent in the sales of Mehran and Bolan, respectively. This robust growth in sales for cars in the 800-1000 cc range for PSMC is expected to grow into the FY13 as the Punjab Government is planning to continue their Yellow taxi scheme, which will allow Pak Suzuki to increase its market share in terms of total sales. The share of PSMC has already risen to 63 percent from 56 percent during the last year mainly due to the aforementioned Taxi scheme. Excluding the additional sales due to the Punjab Governments initiative, it could be argued that the market for automobiles has actually shown only a marginal improvement over the last year, as the growth barring the PSMC sales is only a meager 3 percent year-on-year. The market for cars in the 1,000cc and over the 1,300cc range has also shown a mainly downward sloping trend with the sales of Honda Atlas Cars (HCAR) going down 33 percent year-on-year, principally due to disruptions in its manufacturing facilities affected by the floods in Thailand. With HCAR struggling to slowly regain lost ground, the Indus Motor Company also posted a declining MoM sales down 7 percent to 4,846 units in 11MoFY12, a major cause for which has been the phasing out of Coure from the market. However, the sales figures for Corolla remain positive, with the countrys highest selling car going up 9 percent YoY in 11MoFY12. These figures add to the increasing concerns that the large upsurge in car imports under the new scheme that allows importers to bring in re-conditioned vehicles - which are now practically customs duty exempted - will distinctly hamper the local automotive manufacturers and cause major losses to the different stakeholders of the automotive industry. According to industry estimates, upwards of Rs.10 billion have already been siphoned away from the domestic automotive parts manufacturers in the last 6 months. If this trend for importing vehicles stays on the rise, experts warn that thousands of people would have to be laid off as local auto parts manufacturers face the dire consequences of having to import spare parts for these vehicles..

source Business recorder

[Haider53]

The production of cars has reached at an all-time low level in July due to steep decline in orders received by local automobile makers, said Indus Motor Company (IMC) CEO Pervaiz Ghias.

Briefing the newsmen on Monday, he said the sharp decline in demand of local cars coupled with influx of imported cars have forced IMC to cut down schedule production days by five days a month.

The booking orders of cars have recorded a record low in the current month hence the company decided to keep their plants shut for five days in July and six days in August, he said and added that similar shutdown is being carried out in two leading automobile makers.

IMC produces an average 4,500 units of its different brands on monthly basis however its production will go down by 1,000 units in the next two months, IMC CEO said, pointing out that various brands of local cars stand unsold at local dealers whereas the automobile companies have extra inventory of their brands.

The demand of local automobile industry decreased because of the end of Yellow Cab scheme, price-hike on local cars followed by Euro II compliance and imported cars, he mentioned

The imported used cars have impacted negatively the sale of locally-made cars with 55,703 units as compared with IMC’s last financial year sale of 55,041 units.

Imported cars sector sales surpassed from IMC sales apparently, now the policymakers should compare and decide who contributed well to economy, he raised a question.

IMC is providing revenues for national kitty, working with more than 60 vendors and 40 dealers for after sales services. It provided thousands of direct and indirect employments, and brought technology and engineering activities in local industry, Ghias said.

He pinned hope that local demand and sales of cars will pick up in the last week of Ramazan as usual as every year and the situation of the sale will improve with the passage of time.

The IMC CEO unveiled a new strategy of his company for facilitating customers, which is the introduction of partial payment scheme on all of its Toyota variants.

Accordingly, the option is available to individuals as well as corporate bodies by which the customer may make an initial payment of Rs 250,000 for Corolla, Rs 500,000 for Hilux and Rs 10,00,000 for imported CBU vehicles through a pay order or demand draft in the name of IMC at the time of applying for booking of a vehicle.

The company has decided to take few measures to minimise the abuse of the facility, that in one year, from the date of booking, the customer may make only one application for booking of a vehicle through availing themselves of partial payment scheme.

Multiple applications for booking of vehicles on the basis of partial payment are not permitted.