KARACHI: Auto sales accelerated 2 percent month-on-month in May with 22,893 units, according to data shared by Pakistan Automotive Manufacturers Association (PAMA) on Monday.
However, monthly sales were down 50 percent in May year-on-year. The industry also posted 50 percent growth overall in the 11 months of the fiscal year 2022, as car makers managed to sell 251,000 units.
“It is the highest ever 11 month sales numbers,” said Muqeet Naeem, research analyst at Ismail Iqbal Securities. “The weakening of demand is yet to be visible in automobiles as the higher lead times supported volumetric growth.”
Indus Motor Company, which manufactures and sells Toyota cars in Pakistan, posted a flattish 2 percent growth at 5,882 units. The minor growth in company sales was led by a slight increase in sales volumes of Corolla and Yaris to 4,263 units at 4 percent month on month increase. The sales volumes of Fortuner and Hilux remained flattish on a monthly basis.
Pakistan Suzuki sales dropped 3 percent to 12,212 units, with Cultus sales dropping to 1,270 units, largely offset by 24 percent sales growth in Wagon-R to 2,258 units. Swift volumes declined sharply by 23 percent MoM to 1,744 units after posting highest ever monthly sales last month.
Sales of Honda Cars went up 11 percent MoM mainly led by an increase in sales volumes of City and Civic to 2,681 units, up 18 percent. Honda BR-V volumes posted a decline of 37 percent to 229 units.
Hyundai posted its highest ever monthly sales numbers of 1,710 units since its inception in January 2020, which was primarily led by highest ever monthly sales numbers of Elantra and Sonata to 594 and 400 units, respectively.
Among tractor companies, Millat Tractors posted growth of 12 percent MoM to 2,505 units, while sales of Al Ghazi Tractors fell 8 percent to 2,401 units. In May, two and three-wheeler sales dropped 2 percent MoM, while YoY sales were flat. The 11-month sales of the category dropped by 4 percent to 1.68 million units from 1.75 million units sold for the same period last year.
“We expect demand contraction to initiate by the end of calendar year 2022 due to higher interest rates, imposition of CVT tax and increase in advance taxes in the budget,” said Naeem. “Restrictions on auto financing and the likely third round of price hike by automobile players would also negatively impact car sales.”
Research analyst at JS Research Wasil Zaman said that they were expecting a sales decline of up to 25 percent due to increasing car prices, increasing interest rates and State Bank’s restrictions on auto financing.