The first half of this fiscal year has proved to be utterly disappointing for local auto industry as sales fell by 43.2% to 59,097 units from 104,038 units sold in the same period in previous year.
The primary reason for this decline is attributed towards FED and custom duties implemented by the government earlier last year whereas depreciation of PKR against US Dollar also contributed towards multiple price hikes which resulted into lower sales. However during the last 7 months, the Rupee has regained its strength by 5.5% and now stands at Rs 154 against a Dollar, still automakers have kept increasing prices to dampen their declining profits which also casted a negative impact on car sales.
According to data released by PAMA (Pakistan Automobiles Manufacturers Association), almost every vehicle suffered from a massive decline in sales. The topmost being the Suzuki Wagon R which saw a 72% drop in sales with 4,546 units in 1H-FY19-20, followed by Honda Civic/City which suffered 68% decline to 6,919 units while Suzuki Bolan sales were down 66% to 2,790 units.
|Honda Civic/ City||6,919||21,784||-68%|
|Suzuki Wagon R||16,081||4,546||-72%|
It is interesting to note that local auto assemblers claim to have achieved up to 70% localization whereas motorcycle assemblers boast a 92% localization level, still prices of both cars and motorcycles were revised several times in year 2019 owing to the rupee depreciation and rising cost of imported parts. The impact was thus fully transferred on to the consumers which pushed the prices out of the reach of masses.
Prices of local automobiles have again been revised from the beginning of New Year and in these circumstances sales are not likely to gain momentum.