KARACHI: The auto sector continued to undergo as gross sales for December 2019 slumped 38% on a year-on-year foundation following sluggish demand available in the market coupled with excessive lending charges for vehicle financing. Demand had remained subdued as a result of frequent hike in costs by automakers on account of excessive value of manufacturing.
In accordance with the info launched by the Pakistan Automotive Manufacturers Affiliation (Pama) on Monday, auto gross sales had been recorded at 12,069 models in December 2019 in comparison with 19,423 models in the identical month of 2018.
“Weak demand dynamics had been once more evident from a 38% year-on-year fall in gross sales in December 2019, taking the cumulative decline within the first half of fiscal yr 2019-20 to 44%,” acknowledged Topline Securities analyst Hammad Akram. “The autumn is primarily attributable to excessive automotive costs primarily as a result of rupee devaluation and better rates of interest.”
The outlook of the business remained gloomy as all three automakers posted a year-on-year decline in gross sales.
Honda Atlas Automobiles remained the foremost laggard with a 58% drop in gross sales to 1,005 models in December 2019. The corporate had offered 2,367 models in December 2018.
“Gross sales of Honda Atlas Automobiles fell following mixed gross sales of City and Civic variants declining by 56% on a year-on-year foundation,” the analyst mentioned.
Indus Motor Firm fared no higher and posted a 56% fall in gross sales from 5,324 models in December 2018 to 2,332 models final month. The analyst identified that the principle purpose behind the decline was gross sales of Corolla variant falling by 50% through the interval.
The gross sales of Pak Suzuki Motor Firm fell 26% to eight,732 models in December 2019. The corporate offered 11,732 models in December 2018.
Nonetheless, automotive gross sales registered a rise of 23% on a month-on-month foundation, the info confirmed.
“Total, automotive gross sales jumped by 23% month-on-month to 12,100 models in December 2019, nevertheless, the rise was largely led by a 49% enhance in gross sales of Pak Suzuki Motor Firm,” the analyst mentioned.
“The opposite two main producers, Indus Motor Firm and Honda Atlas Automobiles dropped by 12% and 23%, respectively.” The analyst added that enhance in gross sales of Pak Suzuki was largely pushed by the announcement of a rise in automotive costs by the producer in mid of December, which turned efficient from January 1, 2020.
The analysis home anticipated a restoration in automotive gross sales volumes from begin of 2020 because it believed volumes to have bottomed out in December 2019.