Business & Finance Print edition: 2020-07-14

June passenger cars' sales plunge 52 percent YoY

KARACHI: The sales of passenger cars have declined by 52 percent YoY in Jun-2020 to 8,446 units. According to...

Published July 14, 2020 Updated July 14, 2020 02:57am

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KARACHI: The sales of passenger cars have declined by 52 percent YoY in Jun-2020 to 8,446 units.

According to Topline Research, the car sales, as reported by PAMA, have declined by 52 percent YoY in Jun-2020 to 8,446 units while more than 1,000 units are also expected to be sold by non-registered car assemblers during the month, which will increase the sales by 77 percent MoM during the month as car dealerships became operational after lifting of COVID-19 related lockdowns/restrictions.

Honda Car (HCAR) and Indus Motor (INDU) recorded 514 percent MoM and 199 percent MoM growths, respectively.

The total car sales for FY20 clocked in at 110,583 units, which are the lowest since FY09. The highest contributor to this decline is HCAR with -63 percent YoY decline, followed by INDU with -53 percent YoY and Pak Suzuki Motor with -49 percent YoY.

The year remained turbulent for the car assemblers, as slow economic activity and high interest rates affected demand at the start of the year. In the last quarter, sales were severely affected by COVID-19 outbreak. The Atlas Honda (ATLH) recorded motorbike sales of 90,039 units in June-2020, showing an increase of 5 percent YoY and 644 percent MoM. In FY20, ATLH recorded a decline of 22 percent YoY in its sales, which is the lowest since FY16.

Similarly, the tractor sales in June-2020 jumped by 46 percent YoY and 187 percent MoM. Al Ghazi Tractors (AGTL) and Millat Tractors (MTL) sales have increased by 121 percent YoY and 23 percent YoY, respectively.

The Topline said that the uncertainty regarding tractor subsidy of Rs2.5bn has ended as it was not made a part of budget FY21. As a result, farmers which were holding their buying decision to avail subsidy, have started making purchases in the outgoing month. Moreover, the tractor sales for FY20 are down by 35 percent YoY on an annual basis. Meanwhile, Summit Capital Research expected that automobile sales would restore with a policy rate of 7 percent and easing the lockdowns.

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