In May, reports showed that there was a significant increase in car sales in Pakistan reaching 27000 units (including sales of non-PAMA members). Out of the total, PAMA members sold 19,395 units, whereas 18,626 units were sold in April 2022 according to Capital Stake. It is a surprising number as car prices have experienced a sharp increase.
Passenger Car Sales (May’22)
A total of 19,395 units were sold by PAMA members in the month of May 2022 as compared to 12,934 units in May 2021. Whereas 18,626 units were sold in April 2022.#Pakistan #KSE100 #economy #Automobiles #Autos pic.twitter.com/FrPsCUdrL8— Capital Stake (@CapitalStake) June 13, 2022
Read more: Cars sales up by 25% in March 2022
Although, the government discouraged customers from buying cars to avoid further depletion in the foreign exchange reserves as the vehicles are assembled in Pakistan through imports.
Read more: Analyzing Pakistan’s Automobile Industry
In addition, great appreciation in the US dollar against the rupee resulted in imports becoming more expensive and urged car makers to raise prices. Generally, such dynamics cause a fall in demand as per theory. However, the textbook consequence of prevailing dynamics cannot be witnessed in the patterns in these months as car sales of only PAMA members increased by 33% in May 2022 in comparison to May 2021. Table below shows the breakdown of total number of cars sold by PAMA members according to the brand.
Pak Suzuki (PSMC) was the sole player who stated decline of 3 per cent MoM to 12,212 units in May-2022. All variant of company reported decline on MoM basis except for Wagon-R and Alto where sales were up by 24 per cent MoMand 9 per cent MoM respectively.
Toyota reported an increase of 3.55 per cent MoM.
Honda Atlas Car (HCAR) recorded second highest increase of 11 per cent MoM to 2,910 units in May-2022 led by increase in sales of City & Civic by 18 per cent MoM. Similarly, Indus Motors (INDU) also posted increase of 2 per cent MoM due to increase in sales of Corolla & Yaris by 4 per cent MoM.
Hyundai Nishat posted strong numbers registering an increase of 33 per cent MoM led by increase in sales of Elantra (+148 per cent MoM) and Sonata (+37 per cent MoM).
Analysts at Topline Securities believe economic slowdown, increase in interest rates and additional tightening of financing conditions by SBP will substantially affect car sales in near future.