KARACHI: Car sales in Pakistan registered the annual growth in August for the first time after a 16-month downtrend, rising 8.3% year-on-year (YoY) as lower interest rates are encouraging auto financing, analysts said Thursday.
Car sales last increased YoY in March 2019. Passenger car sales shot up from 9,126 units in the comparable period last year to 9,885 units in August.
However, they dipped 2.3% in August as opposed to July, the Pakistan Automotive Manufacturers Association (PAMA) said. Sales of jeeps, tractors, three-wheelers, and motorcycles also witnessed YoY growth.
The State Bank of Pakistan (SBP) cut policy rate from 13.25% to 7% in almost a three-month period, which analysts said led to reinvigorating auto financing.
While talking to The News, Topline Securities analyst Hammad Akram explained that the demand for cars was expected “to grow stronger as lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19 has revived demand for new cars”.
In August, sales of 1300cc and above cars depicted a rise of 58.4% to 4,748 units, compared with 2,997 units sold in the same month, last year. The main reason for the sales increase was the sale of 1,705 Toyota Yaris during this period.
Toyota Corolla sales crashed 50% from 1,727 units sold a year earlier to 867 units, while those of Honda Civic and City shot up 79% to 1,980 from 1,106 units. Suzuki Swift also saw a growth in sales, from 164 cars to 196 cars.
In August, Suzuki’s Cultus and Wagon R — under the 1000cc category — witnessed a 10% increase in sales to 2,133 as against 1,934 units last year.
Under 800cc, sales dropped 28.4% from 4,195 units during last year’s corresponding period to 3,004 units in August.
The new model of Suzuki’s Alto saw a 30.5% decline in sales from 3,435 units to 2,389 units.
Buses and trucks also saw a minor increase in sales in August from 281 units to 284 units. Jeep sales increased 42% to 421 units from 296 units, whereas pick-up sales rose from 800 units to 1,436 units.
Tractor sales climbed 12% to 2,844 units in August from 2,545 units during the corresponding period last year, while those of rickshaws and motorbikes rose 9.3% from 128,419 units to 140,325 units in August.
Kia Lucky Motors continued to perform well and is also planning to shift its production to double shift from January next year to meet high customer demand, Topline Research said.
Another new entrant Hyundai Nishat launched Tucson in the sports utility vehicle category during August and sold 22 units along with 88 units of commercial pickup Porter H-100.