KARACHI: Pakistan’s automobile industry experienced a significant surge in sales during the month of August 2023, with a staggering 7.6K units sold. This surge, representing a 49% month-on-month (MoM) increase, has sent ripples of optimism throughout the industry.
However, it’s important to note that this impressive rebound comes in the wake of a 36% year-on-year (YoY) decline.
The primary catalyst for this surge can be attributed to the timely removal of import restrictions during July and August 2023. These policy changes provided a much-needed boost to the sector, propelling automobile sales to their highest point since March 2023, according to Arif Habib Limited.
In response to escalating inflationary pressures, consumers have adjusted their preferences towards more budget-friendly vehicles with engine capacities below 1,000cc. This shift resulted in a notable 85% MoM increase in sales within this category.
Production also exhibited signs of recovery, with a 54% MoM rise to 8,385 units. Nonetheless, the year-on-year decline in sales can be attributed primarily to the increasing prices of cars, expensive auto financing, and the limited purchasing ability of consumers.
In specific segments of the market:
1,300cc Segment and Above: This segment witnessed a remarkable 36% MoM increase, largely fueled by a staggering 137% MoM surge in the sales of Honda BRV and HRV.
1,000cc Segment: Sales in this category saw a 57% MoM jump in volumetric sales, driven by a remarkable 103% MoM surge in the sales of the Swift.
Below 1,000cc Segment: Sales in this category experienced an astonishing 85% MoM increase, recording a total of 2,953 units sold.
Key Players in the Market:
- INDU: Indus Motor (INDU) showed an increase in volumetric sales, selling 1,548 units in August 2023, marking a 13% increase compared to the previous month. Sales of Fortuner and Hilux also saw a substantial jump of 43% MoM, totaling 429 units.
- PSMC: In absolute terms, Pak Suzuki (PSMC) made the most significant contribution to the rise in auto sales, with an astounding 75% MoM surge. The sale of 2,769 units of Alto in August 2023, compared to 1,440 units in July 2023, marks a 92% MoM increase.
- HCAR: Honda Cars (HCAR) also experienced a surge in volumetric sales, with a 36% MoM upswing. Notably, Civic/City sales were high, reaching 492 units.
- Tractors: Tractor sales also saw a significant uptick, rising by 48% MoM in August 2023. AGTL sales surged by 52% MoM, while MTL sales reached 2,412 units, marking a 46% MoM increase.
The automobile industry’s resurgence in August 2023 demonstrates its resilience and adaptability in the face of challenging economic conditions. While consumers are navigating financial constraints and rising costs, the removal of import restrictions and the appeal of budget-friendly options have breathed new life into the market, offering hope for a sustained recovery in the months ahead.