KARACHI: Pakistan’s car sales increased 45% year-on-year and declined 8.2% month-on-month in October versus a year on the back of an expanding economy.
Growth was seen moderating on rising borrowing cost and tight credit conditions, the publication reported, highlighting the State Bank of Pakistan’s (SBP) decision on car financing to slowdown off-take in the near-term.
Passenger car sales increased by 45.14% to 17,413 units during October compared to the 11,997 units sold during October last year, as per data from the Pakistan Automotive Manufacturers Association (Pama).
But October sales remained lower by 8.2% to 18,971 units of September 2021, the data showed.
Cumulative sales in the first four months of FY21-22 (July-October) were recorded at 74,952 units, up by 71% to 43,865 units in the same period last year.
Though car sales increased during the outgoing month, some impact was expected on car financing after the SBP increased the down payment limit and reduced the financing period to a maximum of five years, analysts said.
“The effect was visible on [the] sale of smaller cars, which are mostly purchased by low-income people on bank financing,” an analyst was quoted as saying. He said that due to an increase in car prices, inflation, and rupee depreciation, car sales would be affected in the coming days.
In addition to this, the discount rate is also expected to increase in the upcoming monetary policy. “Car financing will be affected, resulting in a decline in car sales,” he said.
During this period, the sales of 1300cc and above cars were recorded at 8,619 units, up 34.46% compared to sales of 6,410 units in the same period last year. It included 2,651 units of Honda Civic and City, 23 units of Suzuki Swift, 3,341 units of Toyota Corolla, 2,037 units of Toyota Yaris, 312 units of Hyundai Elantra, and 255 units of Hyundai Sonata.
In October, the sales of cars with 1000cc engine capacity were 2,631 units, up from 2,014 units in the same month last year. However, October sales remained 44.42% lower compared to the September sales of 4,734 units. Below 1000cc cars recorded sales at 6,163 units from 3,573 units sold during the same period last year. Similarly, buses and trucks saw an increase to 484 units in October 2021 from 366 units in October 2020. Jeep sales increased to 1,229 units from 822 units sold during the same period last year.
Pick-up sales increased to 2,360 units from 1,263 units during the same period last year. Sales of tractors rose to 5,361 units from 4,516 units. The sale of rickshaws and motorbikes slightly increased to 177,329 units during October 2021 against 176,082 units sold during the same period last year, despite awaited results for Sazgar three-wheeler.