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Car sales fall by 51 per cent - Naveed Yaseen - 10-17-2008 09:50 AM
By Hina Mahgul Rind
KARACHI: The bonanza of local car manufacturers has come to a halt with local car sales plunging by 51 per cent in the first quarter of financial year 2008-2009.
According to recent numbers released by Pakistan Automotive Manufacturers Association (PAMA), car sales for the month of September were down 29 per cent at 7,889 units against 11,072 units sold during the same month last year.
However, on month on month basis, the car sales increased by 23 per cent primarily due to notable growth in Corolla sales at 1,280 units, which is 275 percent higher than 341 units sold during August 2008. This impressive sales growth is attributable to the commercial production of new model of Corolla.
On cumulative basis, during 1QFY09, total car sales remained 51 percent lower at 19,066 units as compared to 39,297 units sold during the same period last year.
During the 1QFY08, almost all manufacturers registered a decline in sales units. Among major players, massive drop was witnessed in Indus Motor’s sales units with 64 percent decline at 4,659 units that followed by Pak Suzuki Motors (PSMC), which registered 48 per cent decline in sales volume over the same period of FY08.
Indus Motor suspended its production of Corolla in July-August in order to launch its new model, which resulted in 80 percent decline in the sale of the model.
Owing to the production break, Corolla’s market share during the quarter was shredded by almost 820 bps to 24.4 per cent.
On the other hand, market shares of its prime competitors Honda Cars (HCAR) PSMC improved by 690 bps & 350 bps to 6.9 per cent & 3.5 per cent, respectively.
Cumulative sale volumes of Dewan Motors and HCAR also depicted respective declines of 91 per cent and 19 per cent to 86 units and 3,232 units.
During 1QFY09, in 1300cc segment, HCAR witnessed notable stretch in its market share at 60 per cent as against only 27 percent in the same period last year.
Moreover, in 800cc segment, PSMC’s market share eroded by 830 bps to 65 percent while Indus Motors (INDU) share has increased by the same percentage.
On MoM basis, sales volume of all manufacturers has improved over the last month of prevailing fiscal. Sale units of Dewan motors, Indus Motors, Pak Suzuki, and Honda cars recorded an increase of 193 per cent, 76 per cent, 10 per cent and 5 per cent, respectively. During the month (September 2008), the market share of all manufactures registered a decline with exception of Indus Motors, which recorded an 850 bps increase in its market share.
Kamran Rehmani auto analyst at First Capital stated that a host of factors are attributable to this notable industry wide decline i.e. declining real income of consumers, slowdown in car financing due to high mark-up rates, price hike due to pass-on impact of higher input cost and increase in GST by 100bps.
More interestingly, this is not the domestic phenomenon only as more or less for the same reasons (as mentioned above for local car assembler), auto assemblers all over the world are going through a tough time.
This phenomenon is mainly attributable to change in auto finance policies by the suppliers of funds. As pre-emptive measures amid mortgage crisis, auto financiers have become more fastidious or reluctant of disbursing auto loans.
http://www.thenews.com.pk/daily_detail.asp?id=141458