KARACHI: Passenger car sales by Pakistan Automotive Manufacturers Association (PAMA) members surged to a massive 116 per cent year-on-year in May 2024, racing to their highest level in 17 months, which analysts mostly credited to a low base of car sales last year amid several industry shutdowns.
According to PAMA data released Tuesday, passenger car sales in May 2024 reached 8,487 units, up from 3,934 units in May 2023. However, in the 11 months of FY23, total sales were 71,449 units, a 23 per cent decline from 92,554 units in the same period of FY22.
On a month-on-month basis, May 2024 sales were 4 per cent lower, with 8,487 units sold compared to 8,873 units in April 2024.
Mashood Ali Khan, auto expert and former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), noted a slight improvement in car sales but projected total sales would only reach 100,000 units by the end of the year, which he described as unimpressive. Terming the automobile sector as the “backbone of economy”, Khan lamented the lack of support and prioritization for this industry.
He also highlighted the positive impact of the government's SIFC policy on the tractor industry, while criticising the neglect of the truck and bus industry, which produced only 2,365 units in the past 11 months—a figure that previously represented just three months of production.
As per the latest numbers, the motorcycle industry performed relatively well, with Chinese and Japanese brands maintaining leading market shares. “I hope that the new government will focus on industrialisation in its first budget, potentially aiding the industry's recovery and alleviating government debt,” Khan said.
In May 2024, sales of 1300 cc and above cars reached 3,496 units, a 142 per cent increase from 1,445 units in May 2023.
Sales of 1,000 cc cars totalled 482 units, with 229 units of Suzuki Cultus and 253 units of Suzuki WagonR, compared to 430 units in the same month last year.
Vehicles below 1,000 cc saw sales of 4,509 units, up 119 per cent from 2,059 units last year, with Suzuki Alto leading at 4,062 units in May 2024, compared to 1,902 units in May 2023.
Sales of buses and trucks increased to 247 units in May 2024 from 153 units in the same month last year, while sales of jeeps and pick-ups rose to 2,462 units from 1,530 units.
Tractor sales dropped to 3,078 units from 3,508 in May 2023 but remained higher month-on-month than 3,083 units in April 2024. Rickshaw and motorbike sales also increased to 118,811 units in May 2024 from 97,189 units last year.
A research report by Topline Securities noted that Pakistan's car sales reached a 17-month high. Honda Atlas Cars (HCAR) saw an 18 per cent month-on-month increase to 1,187 units in May 2024. Pak Suzuki (PSMC) and Hyundai Nishat Motor sales remained flat at 6,010 units and 683 units, respectively, while Indus Motors (INDU) sales decreased by 1 per cent month-on-month to 2,047 units in May 2024.
The significant year-on-year increase in total car sales is attributed to a low base from last year due to plant shutdowns.
However, the decline in 11MFY24 PAMA car sales was primarily due to escalating car prices, expensive auto financing, and low consumer purchasing power.
“Going forward, we believe that improvement in economic activity following the IMF's new programme, a stable currency, and reduction in interest rates will lead to further improvement in car sales,” said Topline report.
Millat Tractors (MTL) recorded sales of 2,347 units, up 56 per cent year-on-year and 15 per cent month-on-month. In contrast, Al-Ghazi Tractors (AGTL) recorded sales of 731 units, down 64 per cent year-on-year and 30 per cent month-on-month in May 2024. Total tractor industry sales in 11MFY24 reached 41,360 units, up 48 per cent year-on-year due to the low base from last year's floods.
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