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Pakistan’s auto industry off to a spectacular start in 2018

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News Analysis |

Pakistan’s auto industry is off to a good start in 2018. According to a production versus sales data compiled by Pakistan Automotive Manufacturer’s Association (PAMA), local assemblers sold 23,700 units of SUV’s, Sedans and CUV’s in January 2018. This is a 13 percent climb compared in a year-on-year analysis with the corresponding month in 2017. According to statistics, this was the highest monthly unit sale recorded for the start of the year, which is usually not as progressive.

Commentators attribute this growth to taxation policies, buying power and the ever growing demand from online cab hailing services, Uber and Careem. Online cab hailing services have made a serious mark on the auto industry in the past two years. From Suzuki resorting to halt production of the Wagon R in light of a backlog of orders to a whopping 30 percent raise in 1000cc and below cars, Uber and Careem seem to have affected a lot of areas. Cumulatively, industry sales during the seven months of the fiscal year 2018 posted 29 percent growth to 147,838 units.

The expectation was that with lower GST on tractor purchase, fertilizer cash subsidy, along with Rs. 2bn subsidy for farmers on tractor purchase recently announced in FY18 Sindh provincial budget.

Sale of Honda Atlas Cars’ Honda Civic and Honda City went up from 2464 units in December to 3,888. In a year on year analysis, there was a 33 percent climb. Compared to January 2017 sales for Honda went down 28 percent in a month on month comparison. The 7-month fiscal year (from July 2017 – present) sales went up by 50 percent in a year on year comparison to 24,780 units due to the success of new models Civic/BRV and surprisingly, the revamped Honda City, which has been widely criticized online and in ink.

Read more: Pakistani auto-industry thrives during 2017!

Toyota’s Indus Motors Company went down a notch with a decrease of 3 percent in a year on year comparison and 14 percent in a month on month comparison. Toyota’s Corolla, as reported earlier, was the most popular sedan in 2017.

For trucks and buses, sales remained strong, growing by 21 percent in a year on year comparison, while during the 7 month fiscal year 2018 sales rose 18 percent in a year on year comparison with the corresponding period. The rising sales trend is believed by experts to be further fueled by CPEC, higher road connectivity, low financing rate, robust growth in LSM sector and change and enforcement of axle load limit per truck on highways.

Pakistan’s auto industry is off to a good start in 2018. According to a production versus sales data compiled by Pakistan Automotive Manufacturer’s Association, local assemblers sold 23,700 units of SUV’s, Sedans and CUV’s in January 2018.

Motorcycle/three-wheeler sales for December 2017 grew by a 9 percent year on year comparison, due to rising disposable income of the lower middle class, while 7 month fiscal year 2018 sales were up 19 percent in a year on year comparison.

Pakistan Automotive Manufacturers Association (PAMA) recorded tractor sales in a positive trend with sales growing by 5 percent in a year on year comparison in December 2017. According to a local publication, Millat Tractors outperformed with a 53 percent year on year growth. During the 7 month period, tractor sales reached 32,310 units and showed an upward trajectory with a 54 percent year on year comparison.

The expectation was that with lower GST on tractor purchase, fertilizer cash subsidy, along with Rs. 2bn subsidy for farmers on tractor purchase recently announced in FY18 Sindh provincial budget would improve farmers’ purchasing power and thus support overall tractor sales will go forward.


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