Improved consumer confidence helped drag cars sales volume to 75,275 units in the first eight months of current fiscal year - up 37 percent over the corresponding period last year.
This means that if the industry keeps producing and selling at the same pace, its sales volume would likely surpass FY09s full-year number of 82,844 units, by as early as the end of this month.
Though sales slid 10 percent during February in contrast to January, but the decline is largely attributed to higher New Year sales in the first month of the year. February numbers are still higher than the average monthly sale seen in the first half of current fiscal year.
Strong demand for Alto, Mehran and Swift helped PSMC to record a growth of 20 percent during the period, whereas sales of latest City and Civic models boosted Hondas turnover by 24 percent.
Outshining its peers, however, Indus Motors boasted an exceptional growth of 52 percent during the period in question, as buyers continued with their frenzy for Toyota Corolla.
But is this all because of increasing consumer confidence? In the face of high borrowing costs, damp private sector credit off take and rising automobile prices, the answer can easily be,
ot exactly.
Higher import duty and declining rupees falling parity against the U.S dollar has made buyers shy away from imported cars - underpinning the growing appetite for locally manufactured and assembled cars.
"We are currently selling one-year old Toyota Vitz for Rs1.2 million, which was previously sold for Rs0.7 million in 2006-07", said one car dealer situated in Clifton.
Another auto dealer who deals mostly in imported cars said, he hasn purchased any foreign vehicle in the last six months. "Our compounds are empty as consumer demand has slackened," he said.
Going forward, PSMC will likely benefit the most from slowing auto imports, given that overseas purchases had been mostly concentrated in used cars or relatively lower-end new ones.
PSMC will likely realize a solid growth stemming from increasing demand for its recently launched hatchback Swift, which appears quite competitive in terms of prices compared with other local and imported cars.
As for others, especially for Indus Motors, there are still plenty of buyers in the market. And, thats exactly whats keeping its share price at KSE stronger than the index itself.
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AUTO SALES
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Jul-Feb FY10 Jul-Feb FY09 % Chg
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Pak Suzuki 45,616 37,946 20%
Indus Motors 30020 19761 52%
Honda Atlas 8659 6986 24%
Dewan Motors 1005 1345 -25%
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Source: PAMA
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