KARACHI: Total car sales in Pakistan increased up to 90 per cent in 2020-21, but the Pakistan Automotive Manufacturers Association (PAMA) reported sales have increased by 62 per cent year on year.
According to the analysts at Topline Securities, “Pakistan’s total car sales (PAMA, non-PAMA, imports) are estimated to have increased by 90 per cent YoY to 238,000 units in 2020-21, where PAMA reported sales have increased by 62 per cent YoY to 181,000 units during the said year.
The analyst attributed this to the low base effect due to COVID-19 linked lockdowns in 2019-20, as total car sales remain 28 per cent lower than the highest sales of around 329,000 units recorded in 2017-18.
The analyst expects car sales to touch 300,000 units in 2021-22 driven by (1) low interest rates, (2) the launch of new models and (3) a reduction in car prices through lower taxes.
Indus Motors (INDU) remained the star performer during the year as its sales increased by 102 per cent to 57,200 units, mainly driven by the introduction of new models.
Honda Car (HCAR) also posted strong sales growth of 79 per cent despite anticipation of the new model of Honda City.
A gradual gear up by Hyundai Nishat with its inclusion of two new models Tuscon and Elantra, in 2020-21, brought in total sales of 5,800 units.
To recall, Hyundai Nishat officially launched its products in Jan-2020. Lucky Motor Corporation (KIA, non-PAMA member) has made sales of around 23,000 units during the year.
In June 2020, Pakistan car sale, as reported by PAMA, is up by 57 per cent YoY but down 12 per cent MoM.
The analyst believes that expectations of a cut in Federal Excise Duty (FED) and sales tax in the budget may have delayed car purchases.
Atlas Honda (ATLH) recorded bike sales of 1.29 million in 2020-21, up 48 per cent YoY. Tractor sales also followed the same trajectory, growing by 55 per cent to 506,000 units.
Recently, the government has announced a new auto policy for 2021-26. The new auto policy will maintain a balance between imports and exports of the auto sector in Pakistan. Those manufacturers who import the Completely Built Unit (CBU), Completely Knocked Down (CKD) kits, and other spare parts would have to export their vehicles or spare parts as per their imports quantity or import bill, said Makhdum Khusro Bakhtyar, Federal Minister for Industries & Production here on Wednesday.
In a press conference in Islamabad, the minister said that the federal cabinet approved auto policy yesterday. The government has decided to boost the auto sector’s exports in the current fiscal year. The decision has been taken to maintain the ‘Balance of Payment’ of Pakistan, he claimed.
“The auto manufacturers would be bound to deliver vehicles to their customers in 60-day and if it delays the delivery of vehicles would be charged with a penalty up to Rs 50,000 to Rs 200,000 and would have to pay back KIBOR plus 3 per cent to customers on the total deposit amount,” the minister claimed.