Auto industry sales in Pakistan remain depressed due to Covid-19 in May

During May ’20, Pakistan’s auto industry sales stood at only 4,527 units – against 39 units sold in Apr ’20 – thus pushing 11MFY20 auto sales to 102,935 units, down 54%, YoY. The MoM surge in auto industry sales can be attributed to lifting of COVID-19 related lockdown from May 11, ’20 despite: (i) Extended Eid-ul-Fitr holidays; (ii) Recent increase in auto prices by HCAR & INDU and its negative impact on car sales of these auto assemblers; and (iii) Farmers’ decision to withhold buying of tractors in anticipation of a drop in their prices.

Within the car segment, PSMC put up a ‘decent show’ with ‘Alto 660CC’ and ‘Cultus’ turning out to be show stoppers. HCAR and INDU, however, failed to post any decent auto sales numbers – despite the launch of Toyota Yaris by the latter – attributable to the negative impact of recent increase in car prices by both of these auto assemblers on their car sales.

Meanwhile, tractor sales remained depressed during May ’20 despite wheat harvest season being in full swing and upcoming fruit and vegetable seasons. We attribute this depressed tractor sales to farmers’ decision to wait for the implementation of the PKR50bn ‘Agriculture Support Package’ announced by the govt that entails, besides others, removal of GST on tractors for one year and the consequent forecasted drop in tractor prices.

Sharing is caring

Leave a Reply