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Sunday, May 19, 2024

Pakistan’s automotive industry shows unprecedented growth in FY21

Pakistan's automotive industry is expected to grow more than expected in the next financial year; sales are forecasted to grow by sixty percent

The Pakistani automotive industry is expected to enjoy a sixty percent rise in car sales in 2021. The automotive industry also saw more newcomers enter the market than it has in a long time.

The greater than expected rebound has been a result of low-interest rates and “faster than expected economic recovery,” according to Syed Fawad Basir, a senior research analyst at Topline Securities Limited.

“After taking into account the higher-than-expected unit sales in the first four months (July-Oct) of FY21 and an upward revision in margin assumptions, we are revising our earnings forecasts for the Pakistani automobiles universe for the next two years by up to fifty-three percent,” Basir said.

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“We are raising our earlier FY 21 and FY 22 auto car and light commercial vehicle sales assumptions by nineteen percent (to 201,000 units) and five percent (to 228,000 units), respectively,” he added.

According to the State bank of Pakistan (SBP), loans in the automobile industry increased from Rs. 251 billion in March this year to Rs. 270 billion in October.

Online trading helped the automotive industry.

As OLX reported in the vehicle category, buyers of cars and dealers utilized online platforms for trading new and used vehicles, including cars, motorbikes, rickshaws, and tractors, increasingly through the year.

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In the past six months alone, automobiles worth Rs61 billion were sold on one single platform.

The values in the study are estimated based on-demand price. Vehicles are the second most popular category on the online platform OLX, with approximately 100,000 ads actively listed from all over Pakistan on any given day.

GVS News Desk