Car sales plummet by 64.55% YoY on economic woes

February 14, 2023 (MLN): The sale of passenger cars plunged by 64.55% YoY and 56% MoM to clock in at 6021 units in January 2023, compared to 16,985 in January 2022 and 13,780 in December 2022, the monthly data from the Pakistan Automotive Manufacturers Association (PAMA) showed on Tuesday.

A combination of factors has contributed to this downturn. High-interest rates, prolonged restrictions on the import of completely knocked down (CKD) kits, and rising inflation has severely impacted purchasing power, leading to a general economic slowdown. During 7MFY23, the total sales stood at 74,933, plummeting by 43.12% YoY, while the production of cars dropped by 38.61% YoY to clock in at 77,101.

Moreover, the non-availability of CKD parts amid LC issues and increasing non-production days have reflected the lower unit production, with only 5,723 cars produced in January 2023. This marks a significant drop of 58.4% MoM and 68.8% YoY.

Among the major auto manufacturers, PSMC recorded a decline of 74% MoM and 67% YoY to 2,946 units, which is the lowest sales since April-2020 when PSMC recorded zero sales due to the COVID-19-related shutdown. 

However, Indus Motors (INDU) reported an increase of 26% MoM to 3,570 units followed by Honda Car (HCAR) sales of 30% YoY to 2,704 units in January 2023, as per Topline Securities. 

In contrast, Hyundai sales rose by 81% MoM, where Tucson was up 69% MoM to 620 units, and Sonata was up 241% MoM to 191 units in Jan-2023.

Amongst tractors, Millat Tractors (MTL) recorded a jump of 4x MoM to 2,203 units, followed by Al-Ghazi Tractors (AGTL), which recorded a 2x MoM increase in sales to 1,203 units in Jan-2023 primarily due to easing of production issues.

Despite this, total tractor industry sales stood at 14,919 units in 7MFY23, down 53% YoY due to floods, plant shutdowns, lower consumer buying power, and higher prices.

Pakistan bike sales were up 5% MoM while down 29% YoY in Jan-2023. Atlas Honda (ATLH) recorded sales of 90K units, up 6% MoM while down 25% YoY.

Trucks & Buses sales were up 64% MoM while down 40% YoY to 470 units in Jan-2023. This takes 7MFY23 sales to 2,417 units down 37% YoY primarily due to a drop in transportation activity and a slowdown in the overall economy.

Experts are of the view that despite the varied performances of different manufacturers and models, the industry is likely to face further uncertainty and headwinds in the coming months.

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