The first eleven months of FY 19 (July 18 – May 18) faced a 4.11 percent decline in the sale of passenger cars, dropping to 192,863 units from the 201,134 units sold last year during the corresponding period.
Pakistan Automotive Manufacturers Association (PAMA) released data which showed that car sales in May 2019 were at 15,428 units as compared to April 2019’s 17,076 units, which is a 9.65 percent decline. Comparing the May 2019 to its corresponding period from last year’s 18,223 units sold in May 2018, there is a 15.33 percent decrease.
According to analysts, because of the imposition of the suggested custom excise duty on all vehicles in the budget, it is expected that prices would go up, leading to a decrease in sales. A 2.5 percent Federal Excise Duty (FED) has been proposed on vehicles with up to 1000cc engine capacity, a 5.0 percent FED has been proposed for cars with engines of a capacity between 1001cc to 2000cc, and a 7.5 percent FED for vehicles with engines above 2000cc.
Ex-chairman of Pakistan Automotive Parts and Accessories Manufacturers (PAPAAM) Mr. Mashood Ali Khan says that with rupee’s depreciation prices would face a further increase in the upcoming months, discouraging buying. According to him, bank leasing would also not be feasible above a 20 percent interest rate.
In the eleven months of FY19, sales of vehicles with 1300cc and above engines went from 93,885 units compared to last year’s 92,299 units, a total 1.71 percent increase.
Toyota Corolla sales increased by 9.29 percent, from 47,866 units to 52,314 units. Meanwhile, Honda Civic and City went down by 7.0 percent from the previous year’s 39.869 units sold to 37,083 units this year.
Suzuki Cultus and Suzuki WagonR, both 1000cc vehicles, faced an increase of 13.4 percent, with 51,763 units sold against 45,647 units from last year.
The 800cc vehicles witnessed a 25.57 percent drop in sales, to 47,215 units from 63,188 units, following Pak Suzuki discontinuing Mehran, and launching 660 cc Alto at PAPs 2019 in April 2019. Suzuki has booked Alto for corporate customers; however, a final price has not been announced as yet, and the vehicle is yet to hit the roads.
According to analysts, Mehran’s discontinuation had a significant impact on overall car sales. There was an increase in the sales of 1300cc and 1000cc vehicles, while customers wait for Suzuki Alto, which would record in the company’s sales.
In 11MFY19, truck sales dropped to 5,488 units from 8,507 units from the same period last year. However, bus sales increased to 863 units from the 687 units sold in the previous year.
Light commercial vehicles (LCVs), vans and jeeps saw a decline of 40.45 percent from 11,771 units of the corresponding period from last year to 7,009 units this year. Honda’s BR-V dropped to 4.593 units from 7,999 units, and Toyota Fortuner sales fell to 2,416 from 3,772. Tractor sales also witnessed a decrease, dropping from 66,992 to 46,771 units in these past 11 months, a decline of 30.18 percent from the corresponding period of last year.
Its 4.1% for 11 months. It doesn’t look that bad. I was under the impression that the drop would be in double digits.