By Ayesha Mudassar
ISLAMABAD, April 11 (INP-WealthPk): Vehicle sales across almost all models increased significantly in the first eight months of the current fiscal year (21-22) due to the improved purchasing power of consumers, single-digit interest rate, and rapid economic recovery since 2020 when the Covid-19 pandemic peaked and took its toll on almost every sector of the economy.
According to the Pakistan Automotive Manufacturers Association (PAMA), total car sales increased to 149,813 units in f8MFY22 compared to 95,139 units in f8MFY21. February sales rose to 18,054 units from 16,985 units in January 2022. The sales of trucks, buses, jeeps, pick-ups, and tractors also showed an increasing trend in f8MFY22 compared with the corresponding period of the last fiscal year.
Similarly, production of cars increased by 62%, trucks 96%, buses 81%, jeeps 50%, and tractors 10%. Production and sales were higher in February 2022 than in February 2021 for cars, trucks, buses, jeeps, and pick-ups.
The statistical information of PAMA showed a decreasing production and sales trend of motorcycles and three-wheelers for the period under review.
| Production and sales data of motorcycles & three-wheelers |
| |
Cumulative |
Month Comparison |
| F8MFY22 |
F8MFY21 |
Feb 2022 |
Feb 2021 |
| Production |
1,229,332 |
1,266,444 |
135,652 |
154,386 |
| Sales |
1,228,540 |
1,267,844 |
136,527 |
154,409 |
PAMA
Talking to WealthPK, Eng. Asim Ayaz, Secretary Auto Industry Development Committee (AIDC), said the Auto Industry Development and Export Policy (AIDEP) 2021-26 had been approved with the purpose to increase annual production of automobiles from the current 250,000 units to about 600,000-800,000 units during the next five years.
The policy encourages localization and value addition of parts used in car manufacturing and promotes exports.
"To target the export market, the policy aims to encourage innovative technologies, including EVs and hybrids," he added.
The automobile industry is one of the growing industries in Pakistan, employing a workforce of about 3.5 million people and accounting for 3% of the GDP. Its contribution to the national exchequer is approximately Rs50 billion ($310 million) annually.
Honda, Toyota, and Suzuki have long had a presence in Pakistan. New automakers have entered the market from Europe, China, and Malaysia, bringing with them a combined investment of over $1.0 billion.
The China Pakistan Economic Corridor (CPEC) has provided a great opportunity for importing automobile parts and kits from China at a reasonable price. Considering the CPEC initiatives, it is anticipated that the demand will increase substantially.
Prime Minister Imran Khan held important meetings with top Chinese leaders and the business community during his four-day visit to China in February and signed several memoranda of understanding (MoUs). In addition, detailed documents have been shared with the Chinese officials regarding the investment potential and comparative advantages of Pakistan in several sectors including automotive. Royal Group, another Chinese enterprise, was interested in investing $50 million in the auto sector.
The entry of new manufacturers and government support has also contributed to the rise in car sales in the country. Efforts should be made to enhance foreign investment in the sector, which can help create local employment opportunities, foreign exchange earnings, and save on imports through import substitution.
