Heavy taxes, inflation dip car sales in Pakistan   

By Nasir Aijaz
AsiaN Representative

Karachi: The passenger cars’ sale in Pakistan plunged by 36 per cent in September, the sixth consecutive month of decline as the escalating value of dollar and interest rate, and import tariff have hit the slumping industry, according to the data released by manufacturers’ association.

Sales fell to 10,923 vehicles in September 2019 from 16,957 units sold during the same period last year, data by Pakistan Automotive Manufacturers Association (PAMA) showed.

Passenger car sales in the July-September quarter of fiscal year 2019-20 declined 39 per cent to 31,017 units, compared to 51,221 units sold during the corresponding period of the last fiscal year.

The recent data comes as the local automobile industry faces a crippling slowdown in demand amid a broader economic slowdown that has led to production cuts and hundreds of job losses. Production slashed 52 per cent in September. The automobile industry expects car sales decline up to 60 percent during the current fiscal years rendering 150,000 workers jobless, as the automobile industries have started shutting down their plants for eight to ten days a month.

In September, Honda Atlas, Indus Motors and Suzuki slashed their productions to 75 per cent, 59 per cent and 82 per cent, respectively.

“During the month, auto vendors kept their production units shut for around 30 days on cumulative basis,” an industrial official said.

Analysts say high prices of passenger cars following rupee depreciation and an increase in tax rates have curbed sales. “With imposition of custom excise duty on all engine size, vehicles prices have further increased,” an analyst said.

Almost all variants of four-wheelers and above vehicles, rickshaws and motorcycles, except Suzuki’s new Alto, have recorded a decline in sales.

In September, 1,300 CC and above car sales dropped 63 per cent to 3,349 units as compared with 8,963 units sold during the same month in the previous year.

Sale of Toyota Corolla decreased 59 per cent to 1,795 units against 4,426 units sold during September ‘18 while sales of Honda Civic and City were also down 66 per cent to 1,368 cars from 4,083 units, compared to the same period last year. Suzuki Swift saw a decline of 59 per cent to 186 units.

During this period, 1,000 CC cars, Suzuki Cultus and Suzuki WagonR, witnessed a drop in sales by 60 per cent to 1,781 units against 4,455 units last year. Pak Suzuki Motors cut production of both the cars by 54 per cent during the month.

Under 800CC cars, sales remained encouraging only because of Suzuki Alto, which sold 12,943 units in the first quarter and 4,924 cars in September 2019.

Suzuki’s discontinued popular car Mehran saw a decline in the sale by 80 per cent to 466 units only against 2,318 units last year same period.

Sale of buses and trucks dropped around 50 per cent to 264 units from 589 units during the corresponding month last year.

Sales of jeeps fell to 182 units from 611 units during the corresponding period last year. Due to an increase in prices, 108 units of Toyota Fortuner were sold compared to 182 units sold in September ‘18.

Tractor sales also decreased to 3,761 units from 5,818 units during the corresponding period last year, while sales of three-wheelers (rickshaws) and motorbikes also decreased to 126,141 units from 165,719 units last year.