Pakistan’s car sales decline 40% amidst muted demand

Pakistan’s car sales decline 40% amidst muted demand

KARACHI, PAKISTAN: Pakistan Automotive Manufacturing Association (PAMA) has released the sales and production data for the month of Feb’23, where car sales are down by 40% MoM to clock in at 3,642 units.

The decline in sales is mainly due to supply side constraints along with muted demand which has led automobile players to close their plants or operate at minimal capacity. As a consequence of persistent forex challenges, auto industry is presently constrained to meet only 20-25% of their LCs requirements.

In 8MFY23, cumulative passenger car sales during the period plunged by ~48% YoY, to clocked in at 78.6k units due to supply constraints and economic slowdown resulting in subdued demand. 

  • Jeeps/SUVs & pickups sales witnessed a decrease of 56% MoM to reach at 2.1k units. Whereas, on 8MFY23 basis, Jeeps/SUVs & pickups sales fell by 22% due to aforementioned reasons. Trucks & buses sales increased by 40% MoM to clocked in at ~0.7k units in Feb’23. Cumulatively in 8MFY23, trucks & buses sales fell by 30% YoY. Tractors sales went down by 2% MoM due to fragile agriculture demand and supply constraints.
  • Company wise, PSMC sales decreased by 67% MoM in Feb’23 primarily due to aforementioned reasons. Wherein, Swift and Cultus recorded the highest decline of 87% MoM. PSMC plant experienced a shutdown of 7 days during the month of Feb’23.
  • Similarly, INDU sales went down by 49% MoM to clocke in at ~1.8k units, compared to ~3.5k units in Jan’23. Fortuner & Hilux remained the leading contributor to this drop, with their sales down by 62% MoM. To note, INDU plant remained close from 1st Feb’23 to 14th Feb’23 due to LCs restrictions resulting in non-availably of CKD kits.
  • HCAR sales went down by 39% MoM to clocked in at ~1.6k units in Feb’23 .
  • Whereas, Hyundai volumetric sales posted an increase of 11% MoM to clocked in at ~1.3k units.
  • MTL volumes witnessed an increase of 18% MoM to stand at ~2.6k units whereas AGTL sales went down by 39% MoM to clocke in at ~0.7k units.

Analysts believe that automobile industry will remain under pressure on both supply and demand front amid challenging business environment, sky-rocketing inflation and higher financing rates which is further exacerbated by shortage of CKD kits. Moreover, recent increase in car prices amidst PKR devaluation and increase in GST rate likely to further worsen the outlook for automobile sector.

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