Car sales in Pakistan drop by more than 56%

WEB DESK: In October, the Pakistani automotive sector faced a substantial downturn, with passenger car sales plummeting by 24.33 per cent, totalling 4,850 units compared to the previous month’s 6,410 units.

The latest car sales data was disclosed on the website of the Pakistan Automotive Manufacturers Association (PAMA).

On a year-over-year (YoY) basis, car sales witnessed a significant decline of 56.42 per cent, contrasting sharply with the 11,129 cars sold in October 2022.

The production of passenger cars mirrored this trend, decreasing by 38.25 per cent month-over-month (MoM) in October 2023, with 3,868 units produced, compared to 6,264 units in September 2023.

On a yearly basis, production dropped by 63.84 per cent YoY, falling from 10,697 units in October 2022.

For the first four months of fiscal year 2023–24, car sales amounted to 20,871, marking a considerable YoY decrease of 47.4 per cent.

The auto industry in Pakistan grapples with challenges such as high inflation, currency depreciation, low demand, and political uncertainty.

Recent disruptions in the supply chain for critical components have compounded these issues.

Despite the State Bank of Pakistan’s (SBP) relaxation of import restrictions, the auto sector remains a lower priority, and certain restrictions persist on essential parts, hindering production.

US dollar shortages have particularly impacted the import of car parts, leading to temporary shutdowns of plants like Honda and Suzuki.

Exchange rate volatility adds an additional layer of complexity for auto assemblers in planning imports and managing costs.

PAMA’s data release highlighted that the ‘Below 1000cc’ category dominated sales, with the Suzuki Alto leading at 2,602 units.

In the ‘1300cc and Above’ category, Toyota (Corolla & Yaris) took the lead with 796 units. Conversely, the ‘1000cc’ category saw sales of 525 units during the month.

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Truck sales experienced a slight MoM increase of 2.61 per cent, totaling 157 units. However, on a yearly basis, sales declined by 38.91 per cent YoY.

Motorcycle and three-wheeler sales witnessed a 10.88 per cent YoY decrease in October 2023, totalling 101,976 units. Production also decreased by 7.99 per cent YoY, with 116,376 units produced in October 2023.

Cumulatively, the production and sales of motor vehicles for the period stand at 373,128 and 370,966, reflecting a 9.77 per cent YoY and 10.1 per cent YoY decrease, respectively.

Honda emerged as the dominant player in both the production and sales of two and three-wheelers, reporting sales of 322,260 units and production of 326,148 units in the first four months of the fiscal year 2023–24.

Overall, the data paints a challenging picture for the Pakistani auto industry, grappling with a multifaceted set of challenges impacting both sales and production across various vehicle categories.