Sales of automobiles in Pakistan continued to show a decline in May 2019. Passenger and Light Commercial Vehicles (LCVs) saw an 18% decline in sales with 17,891 units sold, compared to 21,813 units sold in May, a year earlier. Sales also fell 8% on month-on-month basis as 19,437 units were sold in previous month.
In 11 months of the current fiscal year, sales of passenger cars and LCVs dropped 7% to 222,774 units from 240,114 in the same period of previous fiscal year. Similarly, sales of trucks and buses plunged 50% on a yearly basis, tractor sales dropped 47% and bike and three-wheeler sales fell 10%.
There are many reasons attributed for negative growth of the auto sector including economic slowdown in the country, 44% depreciation of the rupee against the US dollar since December 2017 and high inflation at 9.11% in May 2019.
Apart from these, a continued hike in the key interest rate, which was raised to 12.25% by the end of May 2019, played a major role in the decline in car sales. Despite all these hurdles which sharply hiked car prices and slashed the purchasing power of consumers, the government has proposed imposition of federal excise duty (FED) on cars of all engine capacities in the new budget. There will be a 2.5% FED on cars of 1000cc and below, 5% on 1001-2000cc cars and 7.5% on vehicles of 2000cc and above. The proposed FED will further push the prices of most of the vehicles out of the reach of masses and will result in slowdown in sales.
As for stats, Toyota Corolla led the charts with 4,069 units sold in May 2019, although this figure is 29% less than what the company achieved in previous month. Honda Civic and City combined sold 2,564 units. In hatchbacks, the segment dominated by Pak Suzuki, Wagon R remained the bestseller with 2,765 units, followed closely by Cultus with 2,546 units. Although the production of Mehran has ended, the company still managed to sell 1,789 units in May 2019. Suzuki Swift with 425 units remains seated at the bottom of the charts, it also saw a 6% decline in sales compared to previous month.
The veteran Suzuki Ravi and Bolan sold 1,285 units and 1,270 units respectively. Other vehicles include Honda BR-V (388 units), Toyota Fortuner (212 units), Toyota Hilux (468 units) and Isuzu D-Max (70 units). Interestingly Honda BR-V saw a 35.5% decline in sales, whereas Toyota Fortuner, Hilux as well as Isuzu D-MAX witnessed an 8.7%, 63% and 70% increase in sales respectively.