Karachi, July 12, 2019: Pakistan Automotive Manufacturers Association (PAMA) released the latest auto sales data for Jun’19, portraying a drop of 2 percent MoM / 5 percent YoY to 17,561 units.
The decline in sales can be attributable to religious holidays in the month of June and a significant increase in car prices due to unfavourable movement in PKR against USD, which affected consumer’s purchasing power. On the other hand, the government imposed Federal Excise Duty of 2.5 percent on locally manufactured vehicles up to 1,000cc, 5 percent from 1,001cc to 2,000, and 7.5 percent from 2,000cc and above, adding pressure on car prices as all the OEMs raised car prices which are effective from 1st July’19.
In the 1,300cc and above category, sales increased by 3 percent YoY while remaining flat on MoM basis to 7,074 units in Jun’19 owing to higher dispatches of Corolla as sales witnessed the growth of 24 percent YoY and 8 percent MoM to 4,406 units.
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In the 1,000cc category, volumes dropped by 11 percent YoY and 32 percent MoM due to a significant decline in dispatches of Cultus by 27 percent YoY and 61 percent MoM to 988 units. In the below 1,000cc category, volumes depressed by 15 percent YoY on account of discontinuation of Mehran while the launch of new Alto failed to arrest the overall decline in sales.
In LCVs+4×4 category, total sales stood at 4,136 units, decreasing by 6 percent YoY, while going up by 11 percent MoM due to bounce back in dispatches of Hilux and BRV by 60 percent and 16 percent MoM respectively.
During FY19, PSMC and HCAR sales dropped by 10 percent YoY and 14 percent YoY to 130,002 units and 44,234 units, respectively while INDU managed to post growth of 4 percent YoY to 65,399 units due to increase in sales of Corolla by 10 percent YoY. Furthermore, tractor sales went down by 29 percent YoY to 50,405 units amid a slowdown in agriculture and economic growth.
We believe various challenges are looming in on auto sector such as continuous currency depreciation, rising interest rates, a significant surge in car prices amid rising costs and additional FED which may dent volumes going forward, we view