Fuelled by economic recovery, the automobile industry has reported a whopping 36 percent growth in auto (car, LCV & Pickup) sales to around 0.11 million units during the first ten months of the current fiscal against same period last year.
Domestic sales have been moving upward in line with growth in global demand since the outset of current fiscal year.
Though, high growth during the year is primarily attributed to the low base effect, but demand also flourished on the back of improvement in agricultural income and higher remittances.
So far, Corolla has been the main beneficiary of the sectors growth, as its sales jumped by 67 percent to 34,000 units against the same period last year.
Behind the zooming demand are improved luxury features in its new model, higher resale value and to some extent,
the low base effect as the company phased-out its previous model.
Bumper crops during the last season also spurred Corollas demand in rural areas, as it is comparatively suitable to drive Corolla on uneven roads compared to small cars. Moreover, its readily available spare parts and mechanics across the country made the choice easier for the rural people.
PSMCs attempt to launch the Swift brand without the CNG feature does not seem to be quite working as its sales nearly halved in April compared to the warm response it received during the first quarter post launch.
At present, the gravest concern is whether the rapid growth in the sector is long lasting or is it just looking big because of prior years low base effect.
Auto industry still faces some really though challenges in the coming months, which include higher steel prices, customs duty and the depreciating rupee against both yen and dollar.
Moreover, rising pressure from general public and ministries to lift the ban on imports of more than three year old cars might also cripple sales.
All the while, growth in auto sector bodes well for the economy, but due to relatively small industry size compared to other regional economies; its impact on overall economy will be minimal.
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AUTO SALES
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Jul-Apr Jul-Apr % Chg
FY10 FY09
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Pak Suzuki 58,644 42,917 37%
Indus Motors 40,062 26,668 50%
Honda Atlas 10,882 9,581 14%
Dewan motors 1,164 1,829 -36%
Total 110,752 80,995 37%
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Source: PAMA