Passenger car sales plummet 29%

Passenger car sales plummet 29%

In the 2024 financial year (from July to April), passenger car sales saw a sharp decline to 62,962 units, marking a staggering 29% decline. This decline is due to various factors including high interest rates, soaring inflation and declining purchasing power, as reported by the Pakistan Automotive Manufacturers Association (PAMA).

PAMA data also revealed a sharp decline in truck and bus sales, plunging to 1,747 units (down 41%) and 371 units (down 35.3%), respectively. Similarly, sales of jeeps and pickups declined to 16,633 units, reflecting a decline of 37.8%. Additionally, sales of two and three-wheelers, including motorcycles and rickshaws, saw a reduction to 941,406 units (a 6.5% decrease).

On the other hand, sales of farm tractors showed an encouraging trend, seeing a significant jump of 38,282 units (representing an increase of 56.6%).

Auto Sector Analyst Mashood Khan stated that the auto industry has faced many challenges in the past two years. However, he emphasized the positive trend of increasing sales of farm tractors, attributing this increase to the efforts of the Special Investment Facilitation Council (SIFC). Khan highlighted the important steps SIFC has made in addressing agricultural sector issues, particularly with the introduction of corporate farming initiatives aimed at reclaiming barren and abandoned land for agricultural purposes.

“If the government does not reduce its high taxes, lower the highest interest rates, and encourage Original Equipment Manufacturers (OEMs) to gradually localize the automotive industry, reviving the struggling automotive sector will remain a formidable challenge,” he stressed.

He warned that without this important initiative, annual car sales may fail to reach 0.4 or 0.5 million units. Khan underlined the need to bring car leasing rates down to single digits, thereby giving buyers an opportunity to buy cars.

Furthermore, Khan lamented the rapid decline in bus sales, attributing it to the influx of Completely Built Units (CBUs) imported by the provincial government. He urged the government to impose a ban on CBU imports to bolster the local industry, which is struggling with challenging times amid rising unemployment.

Industry experts also criticized the government’s policy of encouraging the importation of CBUs and used cars, which poses a major challenge to the domestic automotive sector.

In February 2024, 3,213 vehicles were imported compared to the import of only 396 units in the same month of 2023, showing a staggering increase of 711%.

“Growth in sales of the local automotive industry, which has been under pressure since July 2022, after a 19-month hiatus has been canceled out by a huge increase in used car imports,” said Aamir Allawala, CEO of Tecno Auto Glass Limited.

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