KARACHI: Locally produced vehicle sales, especially cars of small engines, fell in November 2018 as multiple price hikes and restriction on non-filers of tax returns discouraged many buyers.
Sales of the low-end vehicle segment, 1,000cc and below, dropped heavily on the back of a deteriorating macroeconomic situation in the country and challenges faced by the auto sector.
Sales of 800 to 1,000cc cars declined 25% year-on-year and 37% month-on-month in November, according to monthly data of the Pakistan Automotive Manufacturers Association (PAMA) released on Tuesday.
“The major low-end segment has been affected more by the recent situation, however, high and mid-tier segments are also going to go through the same situation,” said research analyst Faizul Sultan at BMA Capital Management Limited.
Overall, automobile sales dipped 17% year-on-year to 17,442 units in November 2018 whereas sales dropped 30% to 17,442 units on a month-on-month basis against 24,850 units in October.
The fall was in line with market expectations due to a worsening economy, the law barring non-filers of tax returns from vehicle purchase and multiple price increases because of rupee depreciation against the dollar, according to a report of Topline Securities.
The interest rate hikes have also hit vehicle sales in the country. The benchmark interest rate has been raised by 425 basis points since January 2018 to 10%, according to the State Bank of Pakistan (SBP).
Sales of Pak Suzuki Motor Company, which caters to almost 50% of the market and meets mostly the demand from low-end customers, plunged 25% to 8,511 units in November against 11,285 units in the corresponding period of last year. Among different models of the company, sales of Swift fell 7%, Mehran 44%, Bolan 39% and Ravi 28% while Cultus sales grew 13%.
Pak Suzuki’s sales declined 37% to 8,511 units in November on a month-on-month basis from 13,346 units last month.
Indus Motor recorded a yearly decline of 7% in sales, which reached 5,479 units in November. On a month-on-month basis, its sales fell 15% to 5,479 units from 6,409 units in October
Toyota Corolla sales grew 9% year-on-year while sales of Hilux and Fortuner decreased 46% and 15%, respectively.
Honda’s sales nosedived 23% to 3,452 in November against 4,456 units in the same period of last year. On monthly basis, Honda sales witnessed a steep fall of 31% to 3,452 units from 5,005 units in October.
During first five months of the current fiscal year, auto sales were recorded at 100,643 units, down 4% against 104,901 units in the same period of last year, which was the first decline in five years.
Pak Suzuki sales declined 11% to 51,425 units against 57,776 units in the same period of last year.
Indus Motor sales rose 7% to 27,307 units compared to 25,558 units in the same period of previous year.
Honda witnessed a meagre 2% increase in car sales, reaching 21,911 units against 21,567 units in the corresponding period of last year. Honda BR-V sales plunged 76% and City and Civic sales on a cumulative basis decreased only 2% year-on-year.