Inflation and reduced purchasing power: Auto sector sees huge cut in sales

Rising inflation and cost of living have forced the people to reset their priorities and a huge reduction is auto sector sales is an example of that with different models witnessing a cut ranging from 28.4 to 61 percent during the first half of 2022-23.  

However, the only exception is the bus segment which may be a manifestation of more focus on public transport as the number of passengers using the mass transit systems in Lahore and Rawalpindi is rising rapidly.

Total bus sales grew by 23 percent to 320  from 260 units in July-Dec 2022 while truck sales, a barometer of the country’s import/export, decreased by 42 percent to 1,627  from 2,802 units.

According to the data released by Pakistan Automotive Manufacturers (PAMA), total car sales stood at 68,900 units in the July-December period with a 40 percent drop compared to 114,774 units during the same period last year.

Meanwhile, the country’s agriculture indicator also remained subdued with 44 percent and 63 percent fall in Fiat and Massey Ferguson sales to 5,212 and 6,301 units as compared to 9,225 and 17,254 units in the first half of 2022-23. Assemblers continued to observe non-production days due to parts shortage and falling sales trends while floods in August 2022 also affected sales.

Buyers’ reluctance stemmed from rising prices coupled with high-interest rates making leasing more expensive with curbs on auto financing and non-opening of letters of credit – resulting in parts shortage that led to production halts by various assemblers and late delivery in Japanese models – also depressing the demand.

The impact of inflation on the low-income groups/ middle class can also be gauged by the fact that the sales of two-wheelers and three-wheelers dipped 33 percent to 627,835 units as compared to 938,355 units last year. It the reason why Honda bike sales came down by 23 percent to 522,770 units as compared to 678,655 units.

But the sales of costly Suzuki bikes surged to 20,762 units from 18,023 units while Yamaha sales showed 44 percent fall to 6,823 units from 12,193 units.

A huge fall of 59 percent was recorded in Toyota Corolla and Yaris sales to 12,065 units from 29,126 while cut for Honda Civic/City was by 49 percent to 8,906 units from 17,620.

However, the new model of Suzuki Swift posted robust sales of 7,136 units from 497 units despite a decline in December sales to 1,428 from 2,242 units in November.

Hyundai Elantra sales came down by 15 percent to 1,297 in the last six months from 1,508 units while its December sales soared to 142 from 101 units in November. Hyundai Sonata sales stood at 551 units showing a drop of 56 percent from 1,240 in July-Dec FY22.

In 1,000cc segment, the fiscal year’s first six months proved disappointing for Pak Suzuki due to 65 percent and 68 percent sales drop in Suzuki Cultus and WagonR to 5,143 and 3,769 units from 14,516 and 11,629 units in the same period last year.

In less than 1,000cc, Suzuki Alto660cc sales remained slow by 15 percent to 27,614 units from 32,388 while Bolan sales registered a 61 percent fall to 2,436 units from 6,241 units in 6MFY22. Alto and Bolan sales in December 2022 were 6,898 and 464 as compared to 7,252 and 503 units in November.

Total jeeps and pickups sales remained 28.4 percent lower than 15,188 in 6MFY23 as compared to 21,202 units in the same period of last fiscal year, while December 2022 sales increased to 3,216 units from 3,099 units in November.

However, Hyundai Tucson depicted a 69 percent jump in sales to 2,230 in the period under consideration versus 1,321 units during the last fiscal year due to discounts on registration and immediate delivery options.

LEAVE A REPLY

Please enter your comment!
Please enter your name here