RECORDER REPORT
KARACHI (July 10 2007): Car sales in the country has reached its highest ever level in June as 18,484 units were sold in a month, 2,490 units higher than its previous record of 15,994 units registered in March 2006.
According to data, released by Pakistan Automotive Association, the cumulative car sales figure for the 2007 fiscal year reveals a growth of 6.3 percent to 165,268 units as against 155,515 units in 2006 financial year. With such a high number, car sales have achieved a compound annual growth rate (CAGR) of 21.7 percent during the past five years (2003-2007 financial years).
"This high number of car sales can be attributed to the lesser interest of investors in the imported vehicles as the import of complete built-up unit (CBU) cars registered a negative growth 13.9 percent during the first 11 months of the current fiscal year over the same period of the last year", Hettish Karmani, an analyst at Atlas Capital Markets said.
According to the latest figures, 26,802 units were imported in 11 months of 2006-07 financial year, of which 18,680 were cars and jeeps of different engine power. Under personal baggage scheme, 12,670 cars of different engine power were imported, followed by 4,651 cars imported under transfer of residence and 44 cars under gift scheme. Disintegrating the sales data by virtue of engine power shows the highest number of sales was 10,655 cars of 1,000cc, followed by 1831 of 1801cc to 3000cc segment.
Cumulative production and sales volume of the listed car assemblers, ie Pak Suzuki, Indus Motor, Honda Atlas Car and Dewan Motors jumped by four percent and nine percent to 196,405 units and 201,421 units respectively.
The giant Pak Suzuki lead the car assemblers with a market share of 61 percent and unit sales of 122,426 in 2007 financial as compared to market share of 54 percent and unit sales of 99,105 in 2006 financial year. Indus Motors followed the footsteps of the leader and secured second position with market share of 24 percent and sales volume of 48,590 locally assembled units. The rest was shared by the remaining two assemblers, who managed to roll out 30,405 units as against 44,399 units in the last fiscal year.
"As per recent notification, the government reduced withholding tax from five percent to 2.5 percent on locally manufactured cars. The levy would be applicable from September", Hettish said.
He further said: "This reduction was done with a view to promoting and strengthening the local industry as earlier the industry apprised the Central Board of Revenue (CBR) about the problems arising from imposition of this levy. "As a result, the assemblers raised the prices of the vehicles and the recent reduction has no chances to bring the prices down", he observed.
Copyright Business Recorder, 2007