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Pak Suzuki, Honda, and Toyota – Japan’s major auto companies – often attributed as the “Big Three” are expected to report a cumulative volume of 87,612 units in Pakistan for financial year 2023-24, a staggering 23% year-over-year decline and a 21-year low, according to a JS Research report issued on Tuesday.

The significant drop was attributed to suppressed demand due to lower consumer purchasing power, increased influx of used imported cars, and higher car prices resulting from currency depreciation and taxes levied on auto manufacturers.

In the financial year 2022-23, the Big Three sold a total of 113,346 units, the report said.

Pakistan car sales drop 3% MoM in March

The decline in the sales volume is a stark reminder of the challenges facing the automotive industry, including rising inflation, currency fluctuations, and shifting consumer preferences.

The 21-year low is a significant setback for the industry that has experienced steady growth in recent years.

However, the three companies are expected to witness nearly a two-fold increase in the sales volume for June 2024, reaching 10.14K units, compared to the same period last year.

The surge in June’s sales was attributed in the report to a lower base due to plant shutdowns at Indus Motor Company Limited (INDU), the manufacturer of Toyota cars in Pakistan, and Pak Suzuki Motor Company (PSMC) last year.

Pharma, healthcare sectors also reeling amid economic crisis

On a month-on-month basis, a marginal increase of 10% is expected in the Big-3 sales for June, led by a significant recovery of 44% expected by INDU.

“The trajectory of volumes going forward can continue with a slow momentum,” said Wadee Zaman, JS Research’s auto analyst.

“While the FY25 budget offered some incentives, like extending concessionary GST for Hybrids (HEVs) until FY26, the increase in advance tax on local cars and lack of regulatory duty on lower-priced imported vehicles (below 1,300cc) are likely to dampen the pace of recovery for domestic automakers,” he added.

After ‘clarity on stock situation’, Lucky Motor opens Kia Stonic booking with Rs780,000 price increase

It may be noted that the sale of Corolla Cross is expected to be around 900 units in June, as more people opted for the hybrid variants amid earlier talks that the government might omit the concessionary GST on hybrids in the budget.

Meanwhile, as per the report, auto loans continued their downward trajectory for the 23rd straight month, clocking in at Rs233 billion, down 23% year-over-year.

However, with the monetary easing cycle beginning last month and further rate cuts expected, sharp interest rate cuts may lead to an uptick in auto-financing in the coming months.

Comments

200 characters
Arsalan Jul 10, 2024 07:56am
THEY DESERVE THIS. THEY HAVE LOOTED US 4 DECADES AND STILL ONLY ASSEMBLE INSTEAD OF MANUFACTURING. THEY DESERVE FURTHER WORSE AS THEY VIOLATED THEIR CONTRACT WITH PAKISTAN. NOW THEY R SHEDDING TEARS
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test Jul 10, 2024 08:18am
Big Three Jewpanese Looters who were looting the country from the past 50 years due to our local assembling and import mafia. These days everybody knows difference between assembling and manufacturing
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Zahoor Jul 10, 2024 10:29am
When the price of cars is unfairly increased, the sales target will never be met. What else happens to cry crocodile tears?
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Zahoor Jul 10, 2024 10:33am
It should be easy to import reconditioned vehicles whose quality and build are much better than the local cars. This will improve the atmosphere of competition and the quality and price of local cars
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M.Khalid Shahbaz Jul 10, 2024 01:01pm
in the absence of a consistent long-term Auto policy, No localisation can be achieved. we must follow the Indian sample case. gift baggage and other back door policies will never produce good results
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Mubashar Jul 10, 2024 02:28pm
Below the lowest international standard & high prices is the main cause of declining sale .
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Zahoor Jul 10, 2024 07:11pm
It should be easy to import reconditioned vehicles whose quality and build are much better than the local cars. This will improve the atmosphere of competition and the quality and price of local cars
thumb_up Recommended (0) reply Reply
Zahoor Jul 10, 2024 07:15pm
@Arsalan, And the sad part is , they are assembling obsolete models cars discarded long back from international auto market and selling to us in highest price.
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Khurram muggo Jul 11, 2024 09:21am
Plz provide info
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Anjum Gulzar Jul 11, 2024 10:12am
The issue behind low sales is price and poor quality Japanese used car are 100 times better than these 3 co vehicles in coming year they will face more decrease in sales
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ali Jul 11, 2024 10:38am
low quality vehicles with no safety features.
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Zahoor Jul 17, 2024 12:12pm
@Mubashar, And one of the reason is , they are assembling world's discontinued/ obsolete models cars and selling it on higher price with features removed. Who will buy??
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