Business

Car sales skyrocket 90% in FY21


KARACHI:

The total number of cars sold in Pakistan in fiscal year 2020-21 soared 90% compared to the previous fiscal year (FY20), but sales remained 28% lower than the all-time high of 329,000 units reached in FY18.

Pakistan’s total car sales were estimated to have increased by 90% year-on-year to 238,000 units in fiscal year 2020-21, stated a report released by Topline Securities on Tuesday.

The report took into account sales by Pakistan Automotive Manufacturers Association (PAMA) and non-PAMA members as well as imports.

According to it, PAMA members sold 181,000 units during fiscal year 2020-21, which was 62% higher than fiscal year 2019-20.

“We attribute year-on-year growth to the low base effect due to Covid-19 linked lockdowns in FY20 as total car sales remain 28% lower compared to the highest peak recorded in FY18,” Topline Research analyst Umair Naseer said in the report.

He projected car sales would hit 300,000 units in FY22 primarily due to low interest rates, launch of new models and reduction in car prices on the back of lower taxes.

“Total vehicle sales during June 2021 fell 12% month-on-month to 13,739 units, which is attributable to a slowdown in small engine car sales,” said Arif Habib Limited analyst Arsalan Hanif in comments to The Express Tribune.

“The decline in sales of low-end cars came because buyers were looking for a relief in the budget as they expected the government to announce reduction in sales tax and federal excise duty.” As a result, car companies reduced prices, which would enhance sales volume in the coming months.

Taurus Securities analyst Mustajab Ali Kazmi said June was the month of budget announcement hence people held back their purchase plans in the hope of new incentives for the automobile sector. Owing to availability of cheaper financing, the outlook for the sector seemed positive, said Kazmi.

Company-wise sales

Indus Motor Company recorded the highest jump in demand as its sales more than doubled to 57,236 units in FY21, PAMA data revealed. The auto firm had sold 28,378 units in fiscal year 2019-20.

According to Naseer, the spike was mainly driven by the introduction of new models. Honda Atlas Cars followed suit with a 79% increase as its sales rose from 16,390 units in FY20 to 29,291 cars in FY21. Sales of Pak Suzuki Motor Company swelled 34% year-on-year to 88,032 units. The company had sold 65,815 units in FY20.

“A gradual gear up by Hyundai Nishat, following inclusion of two new models Tuscon and Elantra in FY21, lifted its total sales to 5,800 units,” said the report. To recall, Hyundai Nishat officially launched its products in January 2020.

KIA Lucky Motors, a non-PAMA member, was estimated to have sold around 23,000 vehicles during the year, the report said.

Published in The Express Tribune, July 14th, 2021.

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