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Business & Finance

Car sales surge by 24% YoY in September

  • Backlog deliveries and promotional discounts drive growth
Published October 10, 2024

Car sales in Pakistan witnessed a significant recovery in September 2024, with total units reaching 10,297, representing a 24% year-on-year (YoY) and 18% month-on-month (MoM) increase, according to the Pakistan Automotive Manufacturers Association (PAMA).

The sharp rise in sales was largely driven by the clearance of Suzuki’s backlog orders.

Topline Research Analyst Myesha Sohail attributed the sales spike to these delayed deliveries in her latest report. “The increase in car sales is driven by the backlog of Suzuki cars, which were delivered this month,” she stated.

Adding to the analysis, Muhammad Abrar Polani, research analyst at AHL Auto, highlighted the factors behind the month-on-month sales surge. “The MoM increase in overall auto sales is primarily attributed to a recovery in demand for PSMC, which had been dampened in 2MFY24 due to plant shutdowns,” he explained.

Auto sales increase 15% YoY in August amid mixed segment performance

“Moreover, recent promotional discounts by INDU and the availability of easy monthly installment (EMI) plans from auto assemblers have enhanced consumer purchasing power, further fueling the rebound in auto sales.”

Osama Naeem, an investment analyst at AKD Securities economical vehicles, particularly those with engine capacities of 800cc and below, have remained strong performers. “Vehicles with an engine capacity of 800cc and below, classified as economical options, continue to experience a surge in sales due to their affordability. In total, 3,761 units were sold, an annual increase of 35%,” he explained.

While falling auto financing rates were expected to boost overall industry sales, Naeem expressed caution regarding this trend. “This might not be materializing as expected, since OEMs are already offering interest-free installment plans for cars, yet there hasn’t been a significant resurgence in sales volumes,” he observed. “We anticipate that financing rates will stimulate sales volumes once they reach single-digit levels and the maximum financing cap of PKR 3 million is lifted by the SBP.”

Car sales down 36% MoM in July over budgetary measures

This takes 1QFY25 sales to 27,585 units a 31% YoY rise from 20,982 units in 1QFY24.

Sazgar Engineering (SAZEW) saw the most significant YoY rise of 174% but down 13% MoM to 827 units in Sep 2024, driven by Haval sales.

Pakistan Suzuki Motors Company (PSMC) saw the highest MoM rise on 37% while also up 18% YoY to 5,013 units in Sep 2024. Ravi sales saw a 57% YoY and 58x MoM rise while Alto also saw a 23% YoY and 56% MoM rise.

Indus Motor Company (INDU) recorded sales of 2,369 units a 48% YoY and 11% MoM rise while Honda Atlas Cars (HCAR) sales reached 1,269 units, down 5% YoY while up 11% MoM.

Corolla, Yaris and Corolla Cross sales rose by 79% YoY and 20% MoM, driven by increased demand for the new Yaris variant, and a boost from Corolla Cross promotional deliveries.

Hyundai Nishat Motor saw a 17% YoY fall while a 15% MoM rise to 677 units in Sep 2024.

In the motorcycle segment, Pakistan’s 2 wheelers and 3 wheelers sales increased by 22% YoY and 26% MoM totaling to 130,960 units in Sep 2024 which is highest sales after 27 months. Rise in motorcycle segment is due to falling fuel prices and falling inflation, creating relatively better purchasing power for customers.

SAZEW’s 3 Wheeler recorded sales of 2,168 units, reflecting a 2x YoY and 32% MoM rise.

In the tractor segment, Millat Tractors (MTL) saw sales of 743 units, down 76% YoY and 39% MoM. Al Ghazi Tractors (AGTL) recorded sales of 333 units, down 86% YoY and 77% MoM in Sep 2024. This brings total tractor industry sales to 1,076 units, a decrease of 80% YoY and 60% MoM, mainly due increase in sales tax from 10% to 18%.

Truck and bus sales were up 74% YoY and 6% MoM, reaching 319 units in Sep 2024.

Comments

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SAd Oct 10, 2024 09:20pm
Hopefully policy rate falls below 15%, then we can expect further surge. Still early days but going by trends GDP growth might surge to 4-5%
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