Car production plunges by 43% in FY23 amid economic woes

July 10, 2023 (MLN): The car industry faced a severe decline in production in FY23, as it only manufactured 137,000 cars, a 43% drop from the previous year, as unveiled during the standing committee on industries and production meeting.

This was mainly caused by the low economic activity and the high-interest rates that discouraged car financing.

The dollar shortage also affected the imports of car parts and raw materials, forcing some plants like Honda and Suzuki to shut down temporarily.

The output of Jeep, SUVs, and other vehicles also suffered from unfavorable market conditions.

During FY22, car production was around 317,000 units.

During FY23, overall sales will likely remain lower by 58% versus the previous year. The sharp decline in sales is due to rising car prices, the decline in car financing amid a sharp rise in interest rates, and ongoing import restrictions imposed by SBP which reduced production by around 54%, a report by Sherman Securities highlighted on July 06, 2023.

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