Due to the ban on imports of auto parts in a bid to reduce the current account deficit (CAD), auto sales in Pakistan fell by 59% to 14,000 units in July 2022 compared to June 2022.
This drop includes sales from non-Pama (Pakistan Automotive Manufacturers Association) members, according to a report by Topline Research.
The decline is mainly due to production problems and rising car prices, which have reduced the purchasing power of consumers. Auto sales also fell 52% in July compared to the same period last year, according to Topline Research analyst Sunny Kumar.
“The decline in sales is mainly attributable to the unavailability of auto parts, due to restrictions on letters of credit (LC) to curb imports, forcing auto players to reduce their working hours to a single shift. work,” said Ali Asif, automotive analyst at Aba Ali Habib Securities. .
Indus Motor (INDU) saw a 62% drop to 2,375 units mainly due to non-production days in July 2022, according to Topline Securities.
Similarly, Hyundai sales fell 89% to 201 units from 1,871 units in June 2022.
Pak Suzuki Motor Company (PSMC) sales were down 58% in July 2022. All variants of the company saw declines in the range of 57-95%, with the exception of Alto, whose sales rose to 4,618 units in July from 1,216 units in June, mainly due to a weak base effect.
“Car sales for July fell due to difficulty in opening LCs
for importing parts and CKD
kits, resulting in lower production and delays in car deliveries,” said Arsalan Hanif, senior automotive analyst.
Honda Atlas Cars (HCAR) also saw a 35% decline to 2,537 units in July 2022. This was driven by City and Civic sales down 30% from June figures.
Among tractors, Millat Tractors (MTL) was down 60% from last month and down 65% to 1,011 units from the same period last year. Al Ghazi Tractors (AGTL) recorded sales of 1,243 units, down 48% from June and 12% lower than the same period last year.
“The decline in car sales is mainly attributable to supply constraints and production shutdown,” said Asad Ali, research analyst at AL Habib Capital Markets Ltd (AHCML).
The State Bank of Pakistan (SBP) imposed restrictions and limited imports of CKD kits, which stalled assembly operations.
Pakistani bike sales were down 33% from June and 34% from the same period last year. Honda (ATLH) reported sales of 80,000 units, down
28% from June and 20% compared to the same period last year.
Sales of trucks and buses were down 22% from June and 37% year-on-year to 379 units in July 2022. This was mainly due to lower transport activity amid a slowing economy. global economy, said Sunny Kumar.
Published in The Express Tribune, August 13e2022.