Suzuki leads as car sales hike

According to data released by the Pakistan Automotive Manufac-turers Association on Monday, the last eleven months have shown an increase of 16 percent, with the sales of locally manufactured automobiles going up to 141,015 units 11MFY12 as compared to the121,455 that were sold during the same period of last year. While the total indigenous production of cars has also increased by 9.1 percent over the last fiscal year, it has been Pak Suzuki (PSMC) that has seen the greatest jump in sales with a 20 percent MoM increase with a reported 10,608 units sold in the last month. The primary instigator in this increase is the Punjab Governments Yellow cab scheme, where the government offered 20,000 units of Suzukis star sellers Mehran and Bolan, at a reduced rate to the unemployed youth of the province. Launched in 5 major cities of Punjab, this scheme has led to an overall year-on-year increase of 39 percent and 54 percent in the sales of Mehran and Bolan, respectively. This robust growth in sales for cars in the 800-1000 cc range for PSMC is expected to grow into the FY13 as the Punjab Government is planning to continue their Yellow taxi scheme, which will allow Pak Suzuki to increase its market share in terms of total sales. The share of PSMC has already risen to 63 percent from 56 percent during the last year mainly due to the aforementioned Taxi scheme. Excluding the additional sales due to the Punjab Governments initiative, it could be argued that the market for automobiles has actually shown only a marginal improvement over the last year, as the growth barring the PSMC sales is only a meager 3 percent year-on-year. The market for cars in the 1,000cc and over the 1,300cc range has also shown a mainly downward sloping trend with the sales of Honda Atlas Cars (HCAR) going down 33 percent year-on-year, principally due to disruptions in its manufacturing facilities affected by the floods in Thailand. With HCAR struggling to slowly regain lost ground, the Indus Motor Company also posted a declining MoM sales down 7 percent to 4,846 units in 11MoFY12, a major cause for which has been the phasing out of Coure from the market. However, the sales figures for Corolla remain positive, with the countrys highest selling car going up 9 percent YoY in 11MoFY12. These figures add to the increasing concerns that the large upsurge in car imports under the new scheme that allows importers to bring in re-conditioned vehicles - which are now practically customs duty exempted - will distinctly hamper the local automotive manufacturers and cause major losses to the different stakeholders of the automotive industry. According to industry estimates, upwards of Rs.10 billion have already been siphoned away from the domestic automotive parts manufacturers in the last 6 months. If this trend for importing vehicles stays on the rise, experts warn that thousands of people would have to be laid off as local auto parts manufacturers face the dire consequences of having to import spare parts for these vehicles.