Latest auto sales numbers are in and they look attractive. Data released by automakers association show that car sales continued to soar at higher-than-anticipated 72 percent growth to 11,208 units in March, providing further evidence that confidence in economy has been improving.
Total car sales volume during the first quarters of the current fiscal year now stands at 86,483 units from 61,185 units sold in the same period last year.
Demand for 1300-cc plus cc cars outshined others - rising by 58 percent in the nine months period, while from the automakers perspective, sales of Toyota Corolla and Suzuki Mehran grew faster than that of their peers.
Indus Motors sales growth topped the list, followed by Pakistan Suzuki Motor Company. On the contrary, Dewan Farooq Motors limited stood as the worst performer with its sales declining during the same period.
Interestingly, appetite for cars continued to surge in the face of rising prices, which increased time and again since the start of this fiscal year.
Cars have been becoming expensive on account of rupees continued depreciation against foreign currencies making imports of components, such as steel and paints, pricier. Car price hike is also justified on grounds of costlier cold rolled steel, used to manufacture auto bodies, which marched 28 percent north in the nine months ending March.
Yet, the recovery in manufacturing activity, along with better crop-support prices and growth in remittances is underpinning the consumers purchasing power, despite tight credit situations in the credit market.
While robust sales growth may also be attributed to the low base effect on account of damp sales last year, it is quite likely that buyers are rushing to showrooms on fears that prices will rise even higher in the coming months.
The fears aren just based on speculation; all indictors point towards further weakening of rupee on the back of rising commodity prices in international market and sticky inflation. With growth in global economy and collapse of the 40-year old annual iron ore contract pricing system, it is quite likely that steel prices will rise phenomenally in the near future.
For those who plan to purchase a car six months down the line, now might be a better time to place your orders.