Warning bells had been wrung. Automakers were keeping shutters down on their production facilities and imported CKD levels had significantly diminished. After November, a 51 percent decline in volumetric sales of locally assembled automobiles during the five months into the fiscal year (i.e. 5MFY24) suggests that a considerable downpour is on the horizon, and companies luring car buyers with deals and offers might not curry “car-sized” favours with customers after all.

Surprisingly, it’s still not just demand. Supply challenges that began over a year ago still loom large—and L/C restrictions persist. But visibly, demand has also shrunk, even for the most desirable cars available in the market. Persistently high-interest rates have hit pause on many a dreams of potential car owners that can no longer afford prevailing car financing rates, while those with cash at hand planning to purchase their second or third car are reluctant to tie up cash in steeply-priced vehicles.

CKD imports have noticeably diminished. The 12M rolling average in Oct-23 shows imports are lowest since FY20 which included the covid-quarter when everything was shut down. The downward slide since Jun-23 indicates that the market would continue to slow over the next few months. All other factors suppressing demand are still in play—inflation is high, cars are expensive, policy rate is holding at 22 percent, and purchasing power has shrunk. Once these fundamentals improve, and supply restrictions ease, companies will have a better chance expanding the now moth-eaten market pie.