May 2023 brought optimism for Pakistan’s auto industry as car sales experienced a monthly recovery of 19%. Nonetheless, a massive annual decline of 77% dampens this resurgence. A report from the Pakistan Automotive Manufacturers Association (PAMA) states around 5.3 thousand units were sold in this period.
Role of PSMC in the Monthly Sales Recovery
The monthly sales recovery is largely credited to PSMC, which witnessed a striking 101% rise. However, the year-on-year decline can be traced back to soaring inflation, significantly reducing consumer affordability.
PAMA also mentioned ongoing challenges in the auto sector due to unexpected plant closures prompted by import restrictions from the State Bank of Pakistan (SBP). For instance, HCAR’s production plant was inactive for half of May. Analysts predict continued pressure on automobile sales throughout the current year.
Inclusive of non-PAMA members, total car sales hit 6,200 units, marking an 18% monthly rise, as reported by Sunny Kumar from Topline Securities. However, except for Pak Suzuki (PSMC), monthly sales declined for all companies, primarily due to a shortage of Completely Knocked Down (CKD) parts.
Cumulative Sales for Fiscal Year 2023
Cumulative sales for the first 11 months of the fiscal year 2023 were 120,158 units, indicating a stark 52% YoY decrease. The decline is largely attributed to the CKDs scarcity, rising car prices, costly auto financing, and low consumer purchasing power.
PSMC stood out with a remarkable 101% monthly growth, selling 2,958 units in May 2023. This rise was propelled by increased demand for Alto, Swift, and Cultus models. The availability of CKD parts and a low base had a part in this significant surge.
Conversely, Honda Atlas Car (HCAR) experienced the most substantial drop of 58% monthly, with only 87 units sold. Hyundai saw a monthly decrease of 31%, with Tuscon and Elantra sales dropping by 38% and 42%, respectively.
Company-Wise Sales Analysis
Indus Motors (INDU) saw a slight monthly decrease of 12%, with 1,718 units sold in May 2023 compared to 1,948 in April 2023.
Millat Tractors (MTL) recorded a 25% monthly increase in the tractor segment, selling 1,505 units, while Al-Ghazi Tractors (AGTL) reported steady sales of 2,003 units. However, the tractor industry’s total sales for the first 11 months of fiscal 2023 were 27,952 units, marking a 46% YoY decline due to floods, plant closures, higher prices, and lower consumer buying power.
May 2023 saw an 18% monthly increase in motorcycle sales in Pakistan. Atlas Honda (ATLH) reported 87,000 units sold, a 19% monthly rise but a 24% annual decline.
Truck and bus sales recorded a slight 1% monthly increase but a significant 69% YoY decline, with 153 units sold in May 2023. The cumulative sales for the first 11 months of the fiscal year 2023 were 3,687 units, reflecting a 38% YoY decrease, primarily due to reduced transportation activity and overall economic slowdown.
