January, the first month of a new year is always considered healthy for auto sales. However this wasn’t the case in 2019. Sales of locally produced vehicles fell 4% in January 2019 as multiple price hikes and a continued ban on purchase of new cars by non-filers of tax returns discouraged many potential buyers.
Sales stood at 22,513 units in January 2019 compared to 23,562 units in January 2018. Bear in mind sales of January 2018 were up 13% compared with 20,884 units sold in January 2017.
In the recent amendment to the finance bill, government has lifted the ban on purchase of new cars by non-filers of tax returns, however official notification has not yet been issued. An estimated 60% of car buyers in Pakistan happen to be non-filers, hence the restriction on purchase dented the local automobile sales quite badly.
Furthermore since December 2017, Pak rupee has weakened 32% against the US dollar, as a result of which automakers have increased prices four to five times due to higher costs and the impact of rupee depreciation during this period.
Related: 2018 The Year of Price Hikes
On a yearly basis, Indus Motor which is performing better than the other two players (Honda & Suzuki) continued to report growth in auto sales, which were up 16% in Jan 2019. Corolla variants led the sales figures, up 26% year-on-year, however, sales of Fortuner and Hilux variants declined 45% and 5% respectively.
Sales of Honda Atlas vehicles grew 3% year-on-year due to 4% increase in Civic and City sales on a yearly basis. The BR-V MPV which is nicknamed an SUV, continued its declining trend with a fall of 2% in sales.
On the other hand, Pak Suzuki Motor Company continued to report a decline in sales, down 15% year-on-year in Jan 2019 after a little breather in December 2018. It is interesting to note that Pak Suzuki sales’ volume has fallen in every month since August 2018 except for Dec 2018. The decline in sales was led by Mehran, Bolan, Swift and Ravi variants, down 37%, 27%, 28% and 11% respectively. However, sales of ride-hailing favorites Cultus and Wagon-R rose 7% and 15% respectively on a yearly basis.
Full Story: Tribune