In Pakistan, the sale of passenger vehicles is on a steeper decline compared to other sectors. The number of units sold last month plunged to 2,844 from 18,626 in April 2022 according to a report by HT’s sister publication HT Auto.
Attributing the numbers to Pakistan Automotive Manufacturers Association (PAMA) and local media, the report added that the massive fall has sounded alarm bells in a country that has hit its highest-ever level of inflation at 36.42 per cent in April. Pakistan’s sales hitting almost rock-bottom paints a gloomy picture for the economy as well as local manufacturers.
Dwindling demand
The biggest and most obvious reason behind the steep dip in sales is a sustained decrease in demand. Factors like rising interest rates, increasing end cost to customers, record-high inflation and spike in fuel prices have affected consumer demand.
Years of financial mismanagement and political instability have pushed Pakistan’s economy to the brink of collapse, exacerbated by a global energy crisis and devastating floods that submerged a third of the country in 2022. Food prices were up by nearly 50 percent in April from a year earlier, with transport costs 57 percent higher.
The entry-level vehicle segments which include cars that are 1,000cc or under are the most severely impacted. In April this year, popular models like Suzuki Alto, WagonR and Cultus (Celerio in India) faced poor sales with only 276 units in the 1000cc segment sold. People looking to purchase vehicles above 1,300 cc also reduced as just 1,585 units were sold in April vis-a-vis 9,189 units in the same month last year.
Industry in doldrums
In Pakistan, it’s not just the passenger vehicles sector that has taken a big hit. The economic crisis has brought the entire automobile industry to its knees. The overall sales in the automotive sector have drastically come down as demand for vehicles like buses, trucks and tractors dipped to a new low. Although sales figures for two and three-wheeler sales were unavailable, it is likely that the segment is also facing trouble.
(With inputs from AFP)
