Arooj Zulfiqar

Auto sales  declined substantially by 47.4 percent year on year in Pakistan in July-Oct period of FY2023, reports WealthPK quoting the data released by the Pakistan Automobile Manufacturing Association (PAMA) recently. According to the data, 20,871 cars were sold during the months under review as against 39,700 units in the same months of the last year. Figures indicate a notable decrease in the sales of Honda Civic and City, with only 2,239 units sold during July-October 2023-24, as compared to 6,416 units sold during the corresponding period last year. Similarly, Toyota Corolla and Yaris experienced 51 percent decline in sales, plummeting to 4,032 units from the previous year's 8,253 units. Talking to WealthPK, Abdul Waheed Khan, a senior representative of PAMA, emphasized the significance of the automobile sector in contributing to the country’s GDP and generating employment opportunities. He highlighted the sector's ongoing challenges, citing inflationary pressure and stringent policy regulations as significant impediments.

“This downturn in the automotive sector is primarily attributed to a diminished economic activity and elevated interest rates, rendering car financing challenging for the general public. “Additionally, shortage of dollars has adversely affected the import of crucial car parts and materials, resulting in temporary closures of manufacturing plants, like Honda and Suzuki. Unfavorable market conditions further impacted the sales of various other vehicle categories. "Inflation has become a persistent concern on Pakistan's economic landscape. Continuous rise in the prices has significantly eroded the purchasing power of consumers, making substantial purchases like automobiles less appealing. Faced with this economic pressure, individuals are opting to defer discretionary spending, including the acquisition of new vehicles. Consequently, the decrease in consumer demand has directly translated into reduced production levels in the automobile sector, as the manufacturers adjust their output to align with the diminished demand," said Abdul Waheed Khan.

Credit: INP-WealthPk