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Economy

Car sales Up by 35% in February 2021

Jump comes due to growing economic activity, lower interest rate

KARACHI: Despite being hit hard in the previous year, Pakistan’s auto sector bounced back as sales grew 35% to 16,436 units in February 2021, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

The surge in sales came on the back of improvement in economic activity, which drove demand for vehicles, and a lower policy rate, which led to an increase in auto financing.

“Improving economic conditions in rural areas because of higher prices for agricultural products, and the improving purchasing power parity also helped drive up sales,” said an AHL Research report.

This image has an empty alt attribute; its file name is cars-21.jpg

However, on a month-on-month basis, auto sales dropped by 6% due to fewer working days in February. Additionally, the decrease in numbers was also due to a decline in sales of Indus Motor Company. According to a Topline Securities report, sales went up by 55% year-on-year including those of Lucky Motor Corporation (Kia, which is not a member of PAMA).

Pakistan Suzuki Motor Company continued to lead the sales growth as it witnessed a jump of 66% to 8,903 units in February 2021.

“The rise is primarily driven by Alto and Ravi with sales of 4,245 units (up 162% year-on-year) and 1,268 units (up 106% year-on-year) respectively in February 2021.”

Sales of Honda Atlas Cars registered an increase of 13% to 2,429 units, while sales of Indus Motor Company fell 3% year-on-year to 4,384 units. The dip was largely due to seasonally high January sales and some supply-side disruptions.

“A new entrant in Pakistan’s auto sector, Hyundai Nishat, sold 651 units in February 2021, while Lucky Motor sold 2,500 units, as per our channel checks.”

In 8MFY21, sales of passenger cars and SUVs jumped 24% to 113,836 units against 91,515 units in the same period of last year. Atlas Honda recorded motorbike sales of 104,005 units in February 2021, up 16% year-on-year. Tractor sales in the month under review ticked up 42% year-on-year to 4,450 units. Within the sector, Millat Tractors recorded a year-on-year increase of 49%, while Al-Ghazi Tractors’ sales increased by 30% year-on-year.

The country’s auto assemblers were hit hard by the Covid-19 pandemic in the second half of FY20, but both production and sales bounced back quickly after July 2020 as factories reopened and pent-up demand emerged.

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