KARACHI: The local car assemblers have observed an exceptional year, selling 180,079 passenger cars, highest ever in Pakistan, during the Fiscal Year 2015-16 (FY16), as compared to 151,134 cars sold in the previous year.
The growth of Pakistani auto industry was on an ascending path from last two years as the industry marked another stellar year, registering 20% increase in sales of passengers cars particularly light commercial vehicles (LCVs), vans and jeeps. The total sales of local vehicles increased by 21% to 216,568 as compared to 179,953 units sold in FY15.
According to the latest figures updated by Pakistan Automotive Manufacturer Association (PAMA), the sale of local vehicles crossed the two million mark for first time in the history of Pakistan. The growth was mainly driven by Toyota Corolla’s new model, taxi scheme by Punjab government, rising consumer sector dynamics and an increase in car financing due to the 42-year low interest rate in the country.
Analysts believe that low commodity prices and favorable turn in currency movements pushed up the auto assemblers’ margins as well as the sales. The State Bank of Pakistan stated in its third quarter report for FY16 that with an exceptional growth of 23.4 percent during Jul-Mar FY16, the automobile industry contributed more than one-fourth of the overall large scale manufacturing (LSM) industry growth.
Continued strong sale of cars introduced last year, availability of cheaper auto financing, extra demand under Apna Rozgar scheme, better law and order situation, and increase in trading activities supported the automobile industry, the SBP added.
The report said that passenger cars, trucks, busses and pick-up vans in particular registered a significant growth in sales. “The key development during the third quarter was the conclusion of Punjab Apna Rozgar Scheme in February 2016. At the same time, the demand for cars and pickups was also normalizing, as consumers await the launch of new models by the leading manufacturers,” the SBP stated.
The industry is likely to benefit from incentives offered to new investment under the much-awaited Automotive Development Policy for 2016-21, expected increase in sales of passenger cars from the launch of new models, and the likely surge in demand for trucks and buses following the planned expansion in the road network.
During FY16, Pak Suzuki Motor Company (PSMC) remained the market leader, selling 96,901 passenger cars in local market mainly due to the invoicing of cabs under the ‘Taxi Scheme’. PSMC registered slight decrease against last year’s sales of 99,879 units. Indus Motor Company (IMC) registered enormous growth this year as well, as the company sold 57,452 units of new Toyota Corolla model as compared to 54,800 units sold last year, making the most popular model of the Pakistan in history. IMC has achieved its highest ever sales since the inception of the company.
Sales of Honda Atlas Cars remained fairly stable at 25,726 units in FY16 versus 23,622 units last year, maintaining its sales growth despite tough competition from new model of Toyota Corolla.
Similarly, production of branded motorcycles and three wheelers dale registered marvelous growth, as total sale of the motorcycles and three wheelers stood at 1,358,643 units in FY16 as compared to 766,733 units sold in FY15.