Originally published at: https://www.pakwheels.com/blog/car-sales-3-first10-months-fy19/
According to the latest stats, passenger car sales have dropped by 3% in the first ten months of the fiscal year 2019. As many as 177,435 units were sold in this period as compared to 182,911 units during the same period of FY18. This drop in sales is particularly linked to the economic slowdown process, sky-rocketing vehicle prices and peak interest rates on the back of the dipping Pakistani Rupee against the US dollar. In April 2019 alone, the car sales were down by 14.1% with 17,076 units as compared to 19,897 units in the previous month of March 2019. Similarly, the sales plunged by 20.7% year on year basis with 21,540 units sold in the same month last year.
In the engine capacity breakdown, cars under 800cc category saw a decline of 23.7% year on year basis as Pak Suzuki, by the start of April 2019 discontinued its iconic Mehran. It contributed to a significant share of car sales in this category, the absence of which has left its mark. However, the auto manufacturer has introduced its replacement in the shape of the 8th generation of 660cc Suzuki Alto which is currently open for booking against PKR 5 lacs for corporate customers only. Surprisingly, the Japanese auto giant in Pakistan has not even announced its final price yet. A total of 44,156 units were sold in April 2019 as compared to 57,944 units in 10MFY18.
On year to year basis, the cars under 1000cc category enjoyed a considerable increase in sales mainly due to the presence of Suzuki Wagon R, which is the hot favorite car for ride-hailing companies in the country. Suzuki Cultus also accompanies the 1000cc segment in which an increase of 11.8% was seen with 46,452 units against 41,533 units in 10MFY18.
The 1300cc and above car segment also witnessed a marginal increase of 4% year on year basis to 86,827 units in comparison to 83,434 units sold in 10MFY18. The above statistics show that the overall car sales drop was mainly contributed by the discontinuation of Mehran otherwise; all the segments above 1000cc witnessed a rise in sales except Honda Atlas Cars which saw a decline of 38% year on year.
On the other hand, the light commercial vehicles (LCV’s) including jeeps and vans went through a significant decline in sales, i.e., 40.4% year on year basis. A total of 6409 units were sold against 10,761 units during the same period last year. The sales of Honda and Toyota vehicles went through a considerable drop as Honda only managed to sell 4205 units of BR-V in comparison to whopping 7497 units down by 43.9%, and Toyota Fortuner sales declined by 32.5% to 2204 units from 3264 units during the same period of FY18.
In heavy vehicles, the sales of trucks went down by 33.5% year on year basis to 5120 units against 7703 units in the same period during FY18. Tractors sales also dipped by 28.3% whereas 25% more buses were sold in FY19 as compared to the same duration of last year.
All the three Japanese auto giants in Pakistan Suzuki, Honda, and Toyota were hit back with dipping sales; however; Honda Atlas received a significant blow with 38% drop year on year basis. The sales of Pak Suzuki dropped by 27% which was majorly contributed by Mehran with 41% decline as it has been discontinued now. The least affected among the three was Indus Motors as the stats reveal that its sales went down by 7% in April 2019. Perhaps the brand has the most robust customer sale base in the country. Toyota Fortuner conceded the maximum drop in sales, whereas the hot-selling Corolla remains the backbone of the brand as it witnessed a 6% sale increase trend.
The uncertainty in the auto industry looms as the depreciation of rupee could easily result in an even worse situation in the future. The prices of all the automobiles are increasing within a matter of months, which is the core reason behind the decreasing buying power. One of the other ways adopted by the public in buying cars was previously bank leasing, but that too doesn’t seem a feasible option anymore with an astonishing 20% interest rate. Therefore, the trend of auto financing has also started to face the heat in the current economic slowdown process in the country. June, the closing month of FY19 is just around the corner, and the auto industry remains uncertain of its future.
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