Pakistan: Car sales declined 16% in November

Cars sales have declined by 16 percent in the month of November 2010 as just 10,259 units were sold in the period compared with 11,911 units previous month, latest numbers released by Pakistan Automotive Manufacturers Association revealed Saturday.

The PAMA figures revealed that leading auto manufacturers witnessed a decline in their sales, with Indus Motors and Pak Suzuki showing considerable decline on month-on-month (MoM) basis. This fall was expected on a MoM basis in November 2010, primarily because of delays in consumers’ purchasing decisions till next year as they opted to avail the New Year’s registration, Furqan Punjani, sector analyst told Daily Times.

He said that this typical trend of declining sales in the second last month of the year is reflected in the historical numbers as well. Flood impact on the auto sector is also being observed now as less registration of cars is being done by the local manufacturers.

Analysts expect that December numbers would also witness a declining trend however; January 2011 sales will likely post a MoM growth, as the ‘New Year factor’ goes by. On a year-on-year (YoY) basis, car sales rose to 52,200 units during the first five months of the current fiscal year (5MFY11), showing an increase of 12 percent as compared to 46,497 units in the corresponding period last year. Production was good in numbers as it recorded an increase of 16 percent to stand 54,381 units as compared to 46,593 units last year.

Car sales in the segment of 1300 and above cc cars witnessed an increase of 14 percent during 5MFY11 to stand at 24,828 units as compared to 21,680 units in the same period last year. Whereas 1000 cc cars also witnessed a marginal increase of just 3 percent to stand at 9,750 units as compared to 9,435 units in last year.

In 800 and below 1000 cc, cars sales surged by 14 percent to 17,622 units compared with 15,382 units in the same period last year. However, trucks, buses and farm tractors recorded decline of 1 percent, 6 percent and 8 percent respectively. However, LCVs, vans & Jeeps and motorcycles & three-wheelers witnessed positive numbers as recorded increase of farm tractors and motorcycles & three wheelers recorded positive numbers, as were 7 percent and 9 percent respectively.

The recent decision of allowing import of 5 year old used cars may not bring down the prices of local produced cars, but will affect the local production and sales and would promote a tough competition in the local market as the consumers would have better choice now, analyst said.

Industry officials said that the government still has not realised the impact of rupee depreciation against the yen on imported parts, which is forcing the local car makers to raise prices on imported but completely knocked down kits and other parts. They said from 2007 to date, yen has appreciated by 113 percent. The decision would hit the industry as in the world markets, people usually sell five year old cars, which will definitely end up in Pakistan for resale, they said adding that three-year age limit had not made any big impact on local car production.

It is pertinent to mention that a total of 72,000 used cars and other vehicles imported under transfer of residence, personal baggage and gift schemes had arrived in 2005-06. At that time, the government had allowed import of 10 years old vehicles. But after a strong representation from the local assemblers, the imports have been continuously falling sharply.