The auto sector experiences a month-on-month recovery despite a year-on-year decline

Web DeskJune 13, 20235083 min

KARACHI: Pakistan’s automobile sector had a ray of optimism when automotive sales increased by 19% month on month in May 2023. It is important to note, however, that this improvement comes with an astounding 77% year-on-year decrease. According to the Pakistan Automotive Manufacturers Association (PAMA), roughly 5.3 thousand units were sold during this time period.

According to Muhammad Abrar of Arif Habib Limited, the monthly sales rebound can be credited to PSMC’s exceptional performance, which recorded an astounding 101% growth. The YoY decline, on the other hand, can be linked to the negative impact of growing inflation, which has considerably impacted consumer affordability.

Furthermore, the vehicle industry continues to suffer hurdles as a result of unscheduled plant shutdowns induced by State Bank of Pakistan (SBP) import limitations, he said. Notably, HCAR’s manufacturing factory was closed for half of May. Automobile sales are expected to stay under pressure during the current calendar year, according to experts.

According to auto analyst Sunny Kumar of Topline Securities, overall car sales including non-PAMA members hit 6,200, representing an 18% MoM rise. Apart from Pak Suzuki (PSMC), all other businesses experienced a MoM drop due to a lack of Completely Knocked Down (CKD) parts.

These sales numbers bring overall sales for the first 11 months of fiscal year 2023 to 120,158 units, a dramatic 52% reduction year on year. This drop can be attributable mostly to the lack of CKDs, rising car prices, expensive auto finance, and consumers’ poor purchasing power.

PSMC increased by 101% year on year, selling 2,958 units in May 2023. Increased sales of Alto (132% rise), Swift (129% increase), and Cultus (59% increase) drove this boom. This considerable rise was aided by the availability of CKD parts and a low base.

However, Honda Atlas Car (HCAR) saw the greatest drop (58% MoM), with only 87 units sold. In May 2023, Hyundai had a 31% decrease in Tuscon sales and a 42% decrease in Elantra sales.

Indus Motors (INDU) saw a 12% drop in sales year on year, selling 1,718 units in May 2023 versus 1,948 units in April 2023.

Read More: The government intends to double the tax on imported automobiles.

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