Car sales rise by 41% in 9M FY10
By Moonis Ahmed
KARACHI: Despite high car prices the consumers’ passion to buy cars remained positive as the total car sales increased by 41 percent during the first nine months of the current fiscal year 2009-10, latest data released by Pakistan Automotive Manufacturers Association (PAMA) said on Saturday.
According to the numbers released by PAMA, the car sales recorded appreciating numbers for 9M FY10 as they stood at 86,483 units showing an increase of 41 percent on yearly basis. The number of units produced during the period stood at 86,613 as against 63,273 recorded during the same period of the last fiscal year, witnessing an increase of 36 percent.
In 1300cc and above cars category, Toyota Corolla contributed most in the overall car sales as it recorded a substantial increase of 73 percent in sales to stand at 29,964 units during the said period. Honda City and Suzuki Liana remained second and third with 5,745 and 770 units, respectively.
In 1000cc cars, Suzuki Alto with highest 7,638 units stood up showing an increase of 53 percent in sales. Suzuki Cultus remained second with a surge of 20 percent in sales. However, in below 1000 and 800cc cars, Suzuki Mehran with 16,228 units showed an increase of 59 percent in sales.
Except, LCVs, vans and jeeps almost all segments of autos including passenger cars, trucks, buses, tractors and even motorcycles and three wheelers showed positive trends.
An analyst was of the view that some of the reasons for improved local car sales are higher taxes on imported cars and economic stability. The situation appears even more stable on yearly basis with strong improvements in the sector.
However, on monthly basis, the car sales’ performance was not up to expectations as it witnessed a bit of increase of just 8 percent. In March 2010 car sales stood at 11,208 units as compared to 10,310 units in February 2010.
Furthermore the increase in car prices by the assemblers during the month under review had made an impact on sales. Some of the leading carmakers had raised prices during the month citing appreciation of foreign currencies especially Japanese yen against the rupee and steel price hike.
Analysts said that almost after a two-year gap, banks have started reviewing their policy on auto finance and have slightly increased auto financing with stringent conditions.
Car sales were showing improvement and a reason was that auto finance along with restoring economic confidence had reduced interest rates and seasonal effects, he added.
Auto finance was at its peak during 2006-07 and its share in car sales was 70 to 75 percent, however in the later years it almost stopped due to higher interest rates, and most importantly, auto finance default rate was very high and recovery rate was very low, which forced banks to do critical review of their auto finance product, he said.
After this some of the banks completely stopped auto financing and some opted very stringent policy, entertaining their reliable customers only.
“The industry may witness consistent growth of 4-5 percent by the end of the current fiscal year,” said JS Research analyst Atif Zafar. “The banks have again reviewed their auto financing policy and are most likely to focus on increasing their financing.”
He said that as compared to last year, banks are now lowering their interest rate on financing and the car financing percentage has gone up to 30-35 now. Pak Suzuki has also made an agreement with a bank for the auto financing and is likely to increase its sales in the coming months.