Pakistan witnesses over 68% YoY decline in car sales

WEB DESK: In November 2023, the passenger car market in Pakistan witnessed a significant downturn, as reported by the Pakistan Automotive Manufacturers Association (PAMA).

Year-on-year, sales plummeted by a staggering 68.41 per cent, with only 4,875 units sold, a sharp decline from the 15,432 units reported in the corresponding period last year.

On a month-to-month basis, there was a marginal uptick of 0.52 per cent, with November sales inching slightly higher than the 4,850 cars sold in October 2023.

The overall production of passenger cars followed a different trend, recording a 10.42 per cent month-on-month increase, totaling 4,271 units in November, compared to 3,868 units in October 2023.

Despite this monthly boost, production witnessed a severe year-on-year drop of 72.46 per cent compared to November 2022’s figure of 15,506 units.

The cumulative sales for the first five months of the fiscal year 2023–24 stood at 25,746, reflecting a substantial 53.30 per cent year-on-year decline, highlighting the challenging conditions faced by the auto industry in Pakistan.

The sector has been grappling with a myriad of issues, including high inflation, currency depreciation, subdued demand, and political uncertainty.

The challenges have been exacerbated by recent disruptions in the supply chain, affecting the procurement of critical components and materials.

Despite the State Bank of Pakistan’s (SBP) efforts to ease import restrictions, the auto sector still has relatively low priority, with sectors like medicine receiving preferential treatment.

Persistent restrictions on essential parts continue to impede the production capabilities of auto assemblers.

A shortage of dollars further exacerbates the situation, impacting the import of crucial car parts and raw materials.

Consequently, some plants, including those of Honda and Suzuki, have been compelled to temporarily shut down.

According to PAMA’s data, the ‘Below 1000cc’ category recorded the highest sales, with 2,113 units.

The ‘1300cc and Above’ category followed closely with 2,033 units, while Honda Cars (Civic & City) took the lead with 912 units, trailed by Toyota (Corolla & Yaris) with 693 units.

In the two-wheeler segment, including motorbikes and three-wheelers, sales experienced a 20.36 per cent year-on-year decline in November 2023, totaling 88,493 units, compared to 111,111 in November 2022.

The production also witnessed a 13.22 per cent month-on-month decrease, dropping to 88,493 units from 101,976 units in October 2023.

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