Auto industry’s rough patch continues as car sales plunge by 44pc

• Only 40,586 units of passenger cars were sold in July-Oct 2019, as compared to 72,563 units in same period last year.
• Sales of Suzuki WagonR declined by 75pc, whereas Honda Civic and City witnessed sales fall of 70pc.

Pakistan’s auto industry’s woeful run continued after the sales of overall passenger cars dropped by a massive 44 percent from the period of July-October 2019.

According to figures of Pakistan Automotive Manufacturers Association (PAMA), only 40,586 units of passenger cars were sold in July-October 2019 as compared to 72,563 units in the same period last year.

Sales of Honda (Civic and City) stood at 4,961 units in July-October 2019, as compared to 16,643 units sold in same period last year, showing a fall of 70pc. In 1300 cc and above cars, Toyota Corolla managed to sold only 7,485 units as compared to 18,814 units sold in corresponding period last year, as sales dropped by 60pc.

In 1000cc cars, the sales of Suzuki WagonR only stood at 2,698 units in the given period as compared to 11,228 units sold in the same period last year, signifying a decline of 75pc. Meanwhile, only 7,475 units of 1000cc cars were sold in July-October 2019 as compared to 18,458 units sold in corresponding period last year.

In below 1000cc cars, Suzuki Bolan sales were recorded at 1,505 units, as compared to 5,412 units sold same period last year, showing a sales decline of  72pc.

Just days ago, it was reported that the struggling auto industry in Pakistan has sought exemption from payment of output tax as the companies are facing major liquidity constraints due to piling up of sales tax refunds.

This submission was made by Indus Motor Company Limited Chief Executive Officer Ali Asghar Jamali in a letter to Federal Board of Revenue Chairman Syed Shabbar Zaidi. He said in the letter that the automobile industry is one the highest tax-paying industry.

However, currently, the automobile industry is going through a severe crisis with lower sales volumes due to the economic slowdown, rising costs of raw material and parts due to increase in duties and taxes on auto sector in the Finance Act 2019-20 and steep rupee devaluation. These factors resulted in value addition below 10 percent for auto sector, which is expected to persist in the foreseeable future.