Car sales rose 11pc in August: The News

KARACHI: After a steep decline in FY09, domestic passenger car sales are once again showing signs of improvement on monthly basis. New fiscal year has started off on an optimistic note for the auto industry.

Car sales continued to progress on path of recovery as August sales depicted a growth of 11 per cent, month on month basis, to 8,441 units as against 7,614 units in the previous month, a sixth consecutive month on monthly rise, as revealed by Pakistan Automotive Manufacturing Association (PAMA).

Some of the reasons for improved car sales are decline in automobile prices, higher taxes on imported cars and economic stability. The situation appears even more stable on year on year basis with strong improvements of 31 per cent. However, because of a lower count in the similar month last year, the numbers portray massive growth in the month.

Importantly, during the first three months of FY09, car sales numbers were unusually low due to phase-out of Corolla’s previous model. In 1Q of FY09 (JulñSept), corolla’s sales averaged at 640 units as against 2,760 units in rest of the period of FY09.

Economic slowdown, limited avenues for auto leasing and record domestic inflation had hit the consumers hard, mostly affecting the lower-end cars. However, with the recovery in domestic economy along with the price cuts by PSMC (dominant player in 850cc segment with 85 per cent market share) the demand for low-end cars has improved. In addition to this, high-end segment cars are becoming less affordable.

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