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KARACHI: The consumers’ confidence in the prospects of improving economy has reflected in terms of car sales increase which has surged by 32 percent to 75,275 units in eight months of current fiscal year 8MFY2009-10, as compared to 54,660 in the same period of the last year.

Pakistan Automotive Manufacturers Association (PAMA) released figures for the local auto sales during first eight months FY2009-10 Wednesday.

According to the latest figures, passenger cars production and sales are up by 32.6 percent and 37.8 percent respectively.

The growth is primarily driven by a 79 percent growth in Indus Motor. The company sales jumped during the period mainly due to a low base effect carried over from last year (phase out of the previous Corolla model), and a strong performance of Corolla. Moreover, PSMC also registered a 20 percent YoY growth during the period.

The new calendar year has started off on an optimistic note for the auto industry and consumers after witnessing better economic indications prefer buying new cars, an analyst said.

In 1300cc and above cars, Honda City and Toyota Corolla witnessed impressive performance, as their production and sale have increase by 28.95 percent, 71.97 percent and 35.15 percent, 76.18 percent respectively.

Some of the reasons for improved car sales are higher taxes on imported cars and economic stability. The situation appears even more stable on year-on-year basis with strong improvements in the sector.

Economic slowdown, limited avenues for auto leasing and record domestic inflation hit the consumers hard, mostly affecting the lower-end cars. However, with the recovery in domestic economy along with the higher taxes on imported cars the demand for locally made cars has improved.

The sector wise figures showed the production and sales of trucks improved by 13.9 percent and by 19.9 percent during the said period. In case of buses, production and sales are up by 10.7 percent and 6.3 percent respectively.

LCVs (Pick-ups) production and sales are substantially down by 21.8 percent and 11.9 percent respectively; however, two/three wheelers, both production and sales are up by 46 percent.

In case of tractors, production and sales are up by 26.8 percent and 30.7 percent, respectively.

Auto (Cars + LCVs) and car sales for February 2010 are up by 90 percent YoY and 73 percent YoY, respectively. Pak Suzuki (PSMC) is the primary determinant for this growth as its sales are up 246 percent YoY owing to abnormally poor sales last year.

In Feb 2009, PSMC witnessed its lowest sales since Dec 2001, due to all time high car prices and interest rates. Indus Motor (INDU) also registered a YoY growth of 38 percent on the back of impressive sales of Corolla. Moreover, Honda Car posted a growth of 15 percent YoY.

However, on a month-on-month basis, auto and car sales were down 7 percent and 10 percent, respectively. The decline in sales is mainly due to higher sales in January because of the New Year factor. Indus Motor and Honda Car sales were down 16 percent and 11 percent, respectively while PSMC sales remained flat at 5,970 units.


However, historical trend shows a contrary picture as 1H of every calendar year proved to be far better for car assemblers due to higher demand from rural areas owing to enhanced liquidity after crop season, he said.

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