Automakers Achieve Good Sales Despite Crippling Issues

In June, 28,379 units were sold as compared to the 23,345 units sold in May. Thus, a 23% appreciation in sales of locally assembled vehicles was observed. This month-on-month decline was reported by the Pakistan Automotive Manufacturers Association (PAMA).

This comes as a surprise given that the rapidly increasing car prices were predicted to reduce sales. The sky-rocketing prices of cars in Pakistan are due to rapid rupee devaluation against the US Dollar, increased taxes, rising freight charges, elevated interest rates for car financing, and the import ban.

However, the non-issuance of LCs, closure of booking, and the subsequent non-production days will likely affect the sales data for upcoming months.

Moreover, the decline in demand of the above 1300cc segment is observed, while the 1,000cc category showed boosted sales due to ease in the supply chain.

Honda Sales Breakdown

Honda Atlas observed good sales in June. The automaker saw a month-on-month increase of 32% as it sold 3,853 units in June. The sales of BR-V increased by 110%.

Toyota Sales Breakdown

Indus Motor Company (IMC) saw a month-on-month increase of 7% in sales in June. The sales of its popular cars i.e. Corolla and Yaris went up by 4.4%.

Toyota Hilux saw an increase in sales of 29% whereas the Fortuner sales remained almost the same as before. The reason for the strong sales of these two models is that they are only targeted toward a niche community that buys high-end cars despite any price elevation.

Suzuki Sales Breakdown

Pak Suzuki achieved a growth of 30% month-on-month sales, taking the figures to 14,981 units. The sales of Wagon R and the newly launched Swift decreased. However, the Suzuki Cultus performed immensely well, showing a growth of 94%.

The good sales scores of Cultus led to rumors that the company was considering discontinuing the Cultus to help increase the sales of its Swift models. However, on our confirming the news from the company, it was revealed that the rumors carried no weight.

Suzuki Cultus sales increased significantly as it is a budget option that still has decent features.

Hyundai Nishat Sales Breakdown

Hyundai Nishat observed a decline in sales with a 2.8 percent month-on-month to 1,287 units in June. While Tucson’s sales went up by 40%, Sonata’s went down by 41%.

Kia-Lucky Motors

Kia Lucky Motors witnessed an MoM increase of 43.3%. Its Sportage and Sorento Showed great sales in June but the Stonic suffered quite significantly.

Non-PAMA members

There are some automakers who have recently joined the auto industry of Pakistan and have subsequently not joined PAMA officially. These include:

• Master Changan Motors
• BAIC-Sazgar
• Regal Motors
• MG Motors
• Al-Haj Proton

Thus their sales elevation/depreciation is not open to the public.

What Lies Ahead?

The future of the automotive industry in Pakistan seems in jeopardy. While buyers have continued to buy despite exorbitant price hikes, now the industry faces an excruciating import ban, depreciating rupee, rising costs of cargo, a super tax, and strict financing laws.

Despite all these problems the industry continued to show strong sales figures. However, economists believe that this increase in sales figures is part of a bubble that is likely to explode now or then.

The explosion of the bubble can further introduce problems like low sales figures, non-production days, companies laying off workers and in a worst-case scenario, some players leaving the country temporarily or permanently.