Where the Skyrocketing inflation has affected the consumers’ purchasing power, the recent restrictions by the State Bank of Pakistan (SBP) have added fuel to the fire – shattered car finance.
Reports have disclosed that auto financing marked a new low in August 2022 – month on month (MoM) decrease of 2.2 percent with Rs. 353 billion. Whilst year-on-year (YoY) jump of 8.8 percent.
Reports have further informed that car financing has witnessed a new down since January 2022. Resultantly, the market may observe production cuts as a consequence.
Restrictions plummeting Car Production
Again, the recent mechanism of requiring CKD import clearance, introduced by State Bank of Pakistan (SBP), has urged the automakers to announce production cuts. Pak Suzuki, Toyota Pakistan, Honda Atlas Pakistan and Hyundai Nishat have left with no option but to observe production cuts.
Granted that the incumbent government is trying hard to overcome the prevailing challenges but the recent economic repulsions led import blockades have further worsened the situation.
Car Sales Marks A New Low
Car sales recorded a downturn in consecutive second months in the face of striking Prices, multiplying inflation, and production cuts. After observing a 58% decline in July, sales are not back on track – dropped 2% last month.
As per PAMA (Pakistan Automotive Manufacturers Association) report, automakers sold a total of 11,645 units in August against 11,853 units in July (MoM decline: 2%). Concerning year-on-year sales, sales charts exhibit a massive drop of 46%.
Car-Wise Sales Breakdown
Pakistan Suzuki Motor Company sold 2,293 units of Alto, 411 units of Suzuki Cultus, 365 units of Suzuki Wagon R, 532 units of Suzuki Swift, 227 units of Suzuki Bolan, and 126 units of Suzuki Ravi.
Toyota Indus sold 2,901 units of Corolla and Yaris and 975 units of Fortuner and Hilux.
Honda Atlas sold 1,436 units of Civic and City and 373 units of BR-V.
Hyundai Nishat sold 581 units of Elantra, 234 units of Sonata, 129 units of Porter, and 985 units of Tucson.
Well, this is a good indication that only genuine buyers will be in the market and auto-makers will have time to focus on their quality issues. SBP has taken good steps in controlling the unnecessary buying of vehicles, to reduce the pressure on import bills against those purchase orders.