By Aamir Shafaat Khan
KARACHI, Sept 11: Except for a decline in motorcycle sales by 23 per cent, the entire auto sector gave a robust performance during July-August 2006, as sales of cars, tractors, trucks, buses and light commercial vehicles (LCVs) surged by 13, 19, 18, 337 and 11 per cent, respectively, over the same period last year.
A total of 26,690 units of cars were sold in the first two months of current fiscal year as compared to 23,530 units in the same period last year, up by 13 per cent.
Surprisingly, the sales of Suzuki Mehran dropped by seven per cent to 5,297 units from 5668 units, while Suzuki Alto sales surged by 85 per cent to 3,821 units from 2,069 units. Suzuki Cultus sales have jumped by 26 per cent to 4,049 units from 3,220 units. Around 1,431 units of Suzuki Liana were sold in July and August.
Figures compiled by the Pakistan Automotive Manufacturers Association (PAMA) revealed that Toyota Corolla sales increased by 64 per cent to 6,212 units from 3,781 units, while Daihatsu Cuore sales rose by 72 per cent to 2,201 units from 1,278 units.
Honda Civic and City sales dropped by 58 and 28 per cent to 1,009 and 2,082 units, respectively, during July-August 2006 from 2,397 and 2,902 units in the same period last year.
Market analysts think that the introduction of new model of Civic last month has diverted the attention of new buyers who are waiting for the new model. It is to be seen how the new Civic will lure the customers at a time when Toyota Xli is planning to roll out the CNG version. However, City is also losing charm, as buyers are more interested in imported and other locally assembled models like Toyota Xli and Mitsubishi Lancer CNG version that are available at competitive prices.
The increase in car segment except for Honda and Suzuki Mehran reveals that buyers still hold a passion for locally assembled cars in some selected models. It seems that the local industry has yet to feel the real pinch of over 45,000 used car imports during July-August 2005-06, as some 30 per cent of vehicles are still parked at the showrooms waiting for the buyers, as very low resale value is one of the main reasons of shying them away from using second-hand imported cars.
Despite an increase in interest rates, auto financing of cars provided by leasing companies and banks continues to play a major role in pushing up the sales of locally assembled cars. “More than 70 per cent cars are being sold through leasing facility, while 30 per cent through cash,” the analysts said, adding that availability of Chinese car Cherry QQ and Korea’s Chevrolet might have caused a stir in the sales of Suzuki Mehran.
Sales of buses have surged by 337 per cent to 958 units from 219 units. Mohammad Irfan Shaikh, director sales and marketing, Hinopak Motors Limited, attributed the increase in sales to orders from the Punjab police and institutional buying from government departments and companies. However, he said commercial sales of buses (on which the industry thrives) had been at the bottom. “We have sold just three buses on commercial basis in July-August 2006 and have not received any commercial order for September,” he said.
Trucks sales surged by 18 per cent to 756 units from 642 units. Mr Irfan said the increase was because of a drop in prices by Rs300,000-400,000 per unit owing to government’s budgetary decision of providing relief in taxes and duties on the local assembly coupled with an increase in economic activities. He said the sales of buses had been laggard since August 15 because of heavy rains in various parts of the country coupled with unrest in Balochistan and other parts of the country after the killing of Nawab Akbar Bugti on August 26.
In motorcycles, PAMA members are mainly comprised of three Japanese bike makers and three to four Chinese bike makers. Their overall sales have plunged by 23 per cent in July-August 2006 to 67,467 units from 87,857 units in the same months of 2005. Market analysts said the sales of some Chinese bike, whose makers were not PAMA members, had increased. Besides, Suzuki motorcycle makers have slashed the rates which have shifted buyers of Honda and Yamaha towards them.
Sales of tractors rose by 19 per cent to 7,974 units from 6,715 units, while sales of LCVs went up by 11 per cent to 4,863 units from 4,373 units.