KARACHI: Auto sales surged 21 percent to 258,632 units during the last fiscal year of 2017/18 as low-cost financing boosted demand of cars, light commercial vehicles, vans and jeeps, brokerage reported on Wednesday.
Brokerages, citing industry data, said auto sales stood at 213,118 units during the previous fiscal year of 2016/17. Daniyal Adil, an analyst at Topline Securities said the strong performance was due to a multitude of reasons ranging from supportive macroeconomic environment, cheaper financing and demand from ride hailing services and elections activity. Honda Atlas Cars witnessed the highest growth of 31 percent among its peers by selling 51,494 units during the last fiscal year.
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Adil said the growth is mostly attributable to 302 percent increase in sales of BRV launched during the last quarter of 2016/17. The automaker, however, recorded a 16 percent sales growth for City and Civic models. Analysts expect continuation in sales growth. “But, we foresee exorbitant growth rates to come down a few notches as non-filers are stopped from new vehicle purchases, rise in prices, and ticking up financing rates,” Hamdan Altaf, an analyst at Taurus Securities said.
“Introduction of new players (Kia, Hyundai, Renault, Ssangyong, Volkswagen), and existing players launching new models and facelifts would contribute towards growth in volumes for all segments.” Pak Suzuki Motor Company’s sales grew 26 percent to 144,070 units in FY2018. Sales of Wagon‐R rose 65 percent, Cultus (up 20 percent) and Mehran (rising 22 percent).
Indus Motors sold a total of 63,068 units during the last fiscal year, up a modest five percent. Adil said capacity constraints brought sales of the company’s flagship brand Toyota Corolla down two percent, while sales of Fortuner and Hilux increased 204 percent and 27 percent, respectively.
In June, sales of locally-assembled cars and light commercial vehicles increased 20 percent to 18,518 units as compared to the corresponding month a year earlier. Altaf attributed growth in monthly sales year-over-year to a jump in sales of Indus Motors due to its paint shop debottlenecking and a 15 percent increase in sales of Pak Suzuki.
He said auto sales declined 15 percent in June over May “owing to recent price hikes and gradually increasing auto-financing rates”. Sales of tractors increased 29 percent to 70,887 units in 2017/18. Sales of buses and trucks rose 15 percent to 9,946 units, while sales of motorcycles and three-wheelers soared 18 percent to 1.889 million in FY2018.
In June, tractor sales dropped 12 percent year-on-year and 42 percent month-on-month to 3,895 units. Arif Habib Limited, in a report, said the decline in tractor sales was due to low yield on sugarcane last year along with insufficient water availability.