Low Interest Rates Boost Auto Sector Growth – Journal
â¢ Total car sales reach 126,679 units in 10MFY21
â¢ Limited factory hours during Ramazan lead to month-over-month auto sales decline in April
KARACHI: Supported by low interest rates, the automotive sector posted a positive performance in the first 10 months of the current fiscal year, with the jeep segment recording the highest sales growth of 193%.
Tractor sales rose 62%, followed by a 57.5% increase in light commercial vehicles (LCVs), cars 48.5%, two and three wheelers 34%, trucks 7.7% and 5.6% bus in 10MFY21.
Low interest rates have emerged as one of the main reasons for boosting sales in the automotive sector – especially cars, light commercial vehicles and vans – and thus increasing the share of auto financing to 40-60 percent. of total car sales according to assemblers. Rising car prices did not seriously affect the buying feelings of consumers who were more interested in vehicle delivery. Instead, late vehicle deliveries and looming high bonuses on cash sales at showrooms have emerged as pressing concerns among buyers.
Meanwhile, assemblers have not offered any price relief for consumers in the past 10 months, despite the rupee’s rally against the dollar from August 2020 to date.
According to data from the Pakistan Automobile Manufacturers Association (PAMA), total car sales during 10MFY21 increased to 126,679 units from 85,330 units in the same period of the previous fiscal year. However, due to limited factory and office hours from April 14 during Ramazan, total car sales in April fell to 14,435 units from 17,105 units in March 2020. As of April 2020 , no production and sale of automobiles has taken place due to the nationwide lockdown as the Covid-19 pandemic has reached Pakistan.
Honda Civic and City sales increased 74% to 20,869 units in 10MFY21. In April, sales of Civic and City fell to 2,053 units from 2,603 ââunits in March. Despite the lack of production in April, Suzuki Swift sales jumped 34% to 2,077 units in 10MFY21. Only 181 units were sold in April compared to 355 units in March.
In 10MFY21, Toyota Corolla sales were 14,979 units, a decrease of 29%. In April, Corolla sales fell to 1,724 units from 2,126 units in March.
Newcomer Hyundai Elantra scored sales in PAMA data with 326 units from March to April.
Sales of Suzuki Cultus and Suzuki WagonR increased 27% and 68% to 13,420 and 10,314 units, respectively, in 10MFY21. Cultus sales were flat at 1,312 units in April from 1,637 units in March, while WagonR sales increased to 1,447 units in April from 1,259 units in March.
Sales of the decades-old Suzuki Bolan grew 62% to 7,245 units in 10MFY21. However, its sales fell to 747 units in April from 1,017 units in March.
Suzuki Alto 660cc sales jumped 19 pc to 33,129 units in 10MFY21, while sales fell to 4,091 units in April from 4,745 units in March.
Increased sales of trucks and tractors
Truck sales increased 7.7% in 10MFY21 to 2,982 units despite a 42% drop in Hino sales to 579 units during the above period.
During the first 10MFY21, sales of Master, Isuzu and JAC trucks improved by 97 pc, new and 464 pc to 722, 1495 and 186 units, respectively.
Hino also continued its negative trend in bus sales, which fell 34% to 166 units, while master bus sales saw massive growth of 84% to 304 units. With 95 units in 10MFY21, Isuzu’s sales remained 27pc below 10MFY20. With a mixed sales trend, total bus sales, however, represented a 5.6% increase in the first 10 months of the current fiscal year to 565 units.
Amid fierce competition with Kia Sportage, MG, Hyundai Tucson and other Chinese brands, locally assembled Toyota Fortuner managed to keep its sales increasing from 163 parts to 2,813 units in 10MFY21. Fortuner’s April sales were below 364 units compared to 508 units in March.
However, Hyundai Tucson with its August 2020 to April assembly line period sold 3,262 units, which is much more impressive than Toyota Fortuner’s sales.
With a 51% jump, sales of Honda BR-V reached 3,116 units in 10MFY21.
In pickup trucks, barring a 49% drop in sales of Isuzu D-MAX to 226 units, other players took advantage of the sales increase during 10MFY21 with 42% in Suzuki Ravi to 8,434 units followed by 83% in sales Toyota Hilux at 5,913 units and 61% in JAC with a sale of 547 units. Newcomer Hyundai Porter, which entered the Pakistani market from January 2020, sold 961 units in 10MFY21.
Sales of Massey Ferguson and Fiat tractors stood at 29,141 and 12,278 units in 10MFY21, up 87% and 26% from the same period last year, indicating positive agricultural indicators.
Rickshaw, bicycle in high demand
Atlas Honda Ltd (AHL) two-wheeler sales increased 39% to 1.076 million units in 10MFY21, while Suzuki and Yamaha sold 19,973 and 18,375 units. United Auto Motorcycle sales increased 30% to 314,393 units, while its three-wheeler sales increased 23% to 5,863 units in 10MFY21 from the same period last year.
Sales of Qingqi and Sazgar three-wheelers increased by 47% and 35% to 15,803 and 12,811 units in 10MFY21.
Posted in Dawn on May 18, 2021