Reduced purchasing power: Car sales down 39% during July-Nov period

Car sales in Pakistan witnessed a slight increase of 0.60 percent in November 2022 when compared with the same month last year but the actual story is that the numbers for the first five months of the fiscal year were down 39 percent when compared with the July-Nov period in 2021-22.

The data released by the Pakistan Automotive Manufacturers Association (PAMA) shows that the number of units sold in July-Nov 2022-23 decreased to 55,144 units against 90,303 units sold in the same period last year.

Moreover, the 0.60 percent increase in sales for November were limited to the cheaper brand of Suzuki Alto  as all other variants of cars, trucks, buses, tractors, jeeps, pick-ups and three-wheelers as well as two-wheelers saw a decline during the said month compared with November 2021.

It shows the reduced purchasing power and the limited options for those who are still willing to buy their own vehicle.  

According to PAMA, car sales increased by 93 units to 15,444 in November compared with 15,351 units traded during the same month last year.

However, the November 2022 sales increased by 39 percent or 4,315 units compared with 11,129 units sold in October 2022.

During this period, sales of 1300cc and above cars were recorded at 5,831 units, down 28 percent compared with the same period last year, when 8,102 units were sold. In November 2022, 1000cc cars recorded sales of 1,854 units, (1,136 units of Suzuki Cultus and 718 units of Suzuki WagonR) against 3,641 units in the same month last year.

Below 1000cc vehicles recorded a sale of 7,759 units, higher by 115 percent or 4,150 units against 3,609 units last year. Suzuki’s new Alto saw remarkable sales of 7,255 units, up by 282 percent to last year’s sales of 2,420 units.

Meanwhile, buses and trucks witnessed a decrease to 342 units in November 22 from 532 units in November 2021. The sale of jeeps and pick-ups went down to 2,947 units from 3,363 units sold during the same period last year.

On the other hand, sales of tractors dropped to 1,240 units from 4,617 units during November last year. The sale of rickshaws and motorbikes decreased to 110,529 units in November 2022 against 166,731 units in the same period last year.

Pak Suzuki reported an increase of 55 percent month-on-month to 12,400 units in November 2022 followed by Honda Car’s increase of 38 percent month-on-month to 1,973 units.

Auto financing slump

Net automotive loans saw a reduction of 1.4 percent on month-on-month basis in October, representing fourth consecutive month downward trend, the latest credit data released by the State Bank of Pakistan showed last week.

This 1.4 percent decrease amounts to Rs4.9 billion contraction, as the first four months (July-October) of the FY 2022-23 with a total reduction of Rs22.658 billion. It is a 160 percent year-on-year decrease when compared with the same period of FY 2021-22.

Production suspended

Also week,, two auto part vendors suspended their production after a massive drop in sales of automobiles since July.

The move means many workers have been jobless in a market where there very few new employment opportunities amid a rising cost of living and shrinking purchasing power.

In this connection, Bolan Castings Ltd (BCL) – the makers of various auto parts of tractors and commercial vehicles – informed the Pakistan Stock Exchange about suspending the production activities from Dec 5 to Dec 23. It cited the drop in sales due to a drastic fall in orders from its assemblers as the reason.

BCL’s revenue had plunged to Rs474 million during the first three months of the current financial year from Rs621 million when compared with the last fiscal year.

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