Car sales surged 104% in July; analysts credit auto-friendly policy

• Passenger car sales increased to 20,669 units in July 2021 from 10,123 units in July 2020, says Pakistan Automotive Manufacturers Association. 
• Analysts say govt has offered major incentives for auto sector. 
• Incentives were aimed at increasing car sales, especially those of smaller ones, say analysts. 

KARACHI: Passenger car sales surged 104% across the country in July 2021, with analysts crediting the spike to an auto-friendly policy and resumption of business activities post the coronavirus lockdown.

As per data released by the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales increased to 20,669 units in the period under review, which compared to the same month last year, showed sales of 10,123 units.

Analysts pointed out that car sales jumped this month as business activities resumed following the coronavirus lockdown that had been imposed to stem the spread of the virus.

“Auto sales would remain on the upside this year, as customers were set to enjoy some benefits under the new auto policy,” they added.

In the period under review, sales of trucks, buses, jeeps, tractors, and pickups increased notably, while that of three and two-wheelers dropped.

During the month, sales of 1,300cc and above cars clocked in at 7,265 units, up 25% compared to 5,803 units sold in the same period.

These sales included 1,700 units of Honda Civic and City, 225 units of Suzuki Swift, 2,320 units of Toyota Corolla, 2,700 units of Toyota Yaris, and 157 units of Hyundai Elantra.

During the month, sales of 1,000cc cars soared to 6,344 units from 1,643 in July 2020, while of those below 1,000cc shot up to 7,060 units from 2,677 last year.

Sales of buses and trucks improved to 343 units in July 2021 from 255 in July 20.

Sales of jeeps surged threefold to 1,200 units from 403 sold in the same period last year.

During this period, 3,049 units of pickups were sold against 1,133 units in the same month last year, while tractors sales increased to 4,332 units from 3,613 units.

The sale of rickshaws and motorbikes declined to 133,426 units during July 2021. That compared to 149,921 units in July last year.

Policy incentives

Analysts said that the government in the FY2022 budget has offered major incentives for the auto sector, which combined with some other expected measures, are likely to become part of the upcoming Auto Policy for 2022-2026.

These incentives were aimed at increasing car sales, especially those of smaller ones, improve share of energy-efficient and environmentally-friendly electric/hybrid cars and enhance overall market size by boosting manufacturing to 300,000 units in FY2022 to 500,000 units by FY2026, analysts said.

Major measures introduced in the budget include the abolishment of 2.5% FED (Federal Excise Duty ) along with the reduction in sales tax from 17% to 12.5% for cars, with an engine capacity of up to 1000cc, offering a total relief of 7% to customers.

Originally published in The News