Pakistan: Automobile Sales Take Nosedive

Total automobile industry sales in July 2022 were reported clocked at 14,375 vehicles (down 51%YoY and 61%MoM), consisting of 10,377 passenger cars (down 50%YoY and 56%MoM), 1,470 LCVs (were down 65%YoY and 70%MoM), and 234 trucks (down 27%YoY and 50%MoM). The massive decline in sales is owing to a supply-side shock hitting the industry resulting from the inability to import of CKD kits.

Segment-wise, the 1000cc segment emerged as the least favorite category, posting a drop of 85%YoY followed by 1300cc+ segment, declining 39%YoY and 800cc and below segment witnessing decline of 30%YoY. On top of it, volumes witnessed similar declines on a MoM basis with the 1,000cc segment declining by 80%, while the 1,300cc and 800cc segments posted declines of 56% and 43%.  Amongst major OEMs, HCAR posted sales of 2,537 units, gaining 10%YoY.

Furthermore, INDU/PSMC posted sales of 2,375 and 6,679 units, down 65% and 56%YoY. On MoM basis, INDU/PSMC/HCAR posted declines of 62%, 58% and 35% for July 2022. On the macro perspective, analysts believe that the steep decline in volumes depicted in July indicate that supply issues have greatly impacted the OEMs, with OEMS experiencing Non-Productive days in the month.

Going forward, SBP has set a quota system for the opening of L/Cs for OEMs, which will impact the sales till at least October. Furthermore, demand will remain impacted with 20% price hikes across the board in recent weeks.

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