By Staff Reporter
KARACHI: Car sales plunged by 59 percent in July as high borrowing costs, tight credit and a slowing economy dragged down demand, an industry body said on Friday.
Year-on-year, the sales slumped 52 percent.
Pakistan Automotive Manufacturers Association (PAMA) data showed that the sales of passenger cars decreased to 10,377 units in July 22 from 20,669 in the same month last year
Auto sales, which grew at a breakneck pace of almost 100 percent in 2021, are driven by an inspirational middle class that relies mainly on bank loans for its purchases. But consistently rising interest rates are forcing consumers to tighten their purse strings.
“Interest rate is going up, availability of financing is down, prices are rising and the sentiment is not very positive among customers. All this put together is impacting final sales,” an analyst said.
He expects a further decline as higher fuel prices, interest rates and vehicle costs crimp demand in the struggling economy surviving on IMF bailout funding.
Brokerage Topline Securities said car sales including those of non-PAMA members clocked in at around 14,000 units, down 59 percent month-on-month, primarily because of production issues, higher car prices, the low purchasing power of consumers, and fewer working days due to Eid-ul-Azha holidays.
Sales of 1300 cc and above cars were recorded at 4,463 units, down 39 percent, compared to 7,265 units sold in the same period last year.
It included 2,408 units of Honda Civic and City, 321 units of Suzuki Swift, and 1,734 units of Toyota Corolla and Toyota Yaris. There were no reports of any sales of Hyundai’s Elantra and Sonata, while results for BAIC D20 are awaited. Only 943 units of 1,000 cc cars were sold, which included 661 units of Suzuki Cultus and 282 units of Suzuki WagonR.
Sales of below 1,000 cc category cars reached 4,971 units, including 353 units of Suzuki Bolan and 4,618 units of Suzuki Alto. Sales of buses and trucks saw a decrease to 379 units during July 2022 from 601 in July 2021.
The sales of jeeps and pick-ups nosedived to 1,506 units from 4,250 units sold during the same period last year, while that of tractors dropped to 2,254 units from 4,332 in July last year. The sales of rickshaws and motorbikes fell to 96,162 units during July 2022 against 145,197 in the same period last year.
Manufacturer-wise data showed that Indus Motor Company posted a 62 percent decline in sales month-on-month to 2,375 units, primarily due to non-production days in the month of July.
Pak Suzuki Motor Company sales sagged 58 percent in July, while month-on-month sales of all of its variants fell in the range of 57-95 percent except for Alto, whose sales jumped to 4,618 units from 1,216 in June 2022.
Honda Atlas Cars also recorded a month-on-month drop of 35 percent to 2,537 units in July 2022 as sales of Civic and City models decreased 30 percent month-on-month.
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