Car companies saw their sales decline significantly – 66% down in December 2023 when compared to sales in December 2022, according to data shared by Pakistan Automotive Manufacturers Association (PAMA) on Thursday.

PAMA-member car assemblers managed to sell just 5,816 units – 66% lower year on year and 10% month on month.

Meanwhile, cumulative car sales for the first half of fiscal year 2024 amounted to 39,454 units, a notable 53% year on year decline. The industry managed to sell 84,116 units during the same period last year.

Passenger car sales in Pakistan plunge 68% YoY in November

“The slump in auto sales can be attributed to overall reduction in consumer purchasing power, an unprecedented surge in inflation, depreciation of rupee (that led to high prices), higher interest rates, which have collectively contributed to a weak demand for new passenger vehicles,” according to AHL research.

“Additionally, the year-end effect played a role in maintaining sales at the lower level,” it added.

Indus Motor Company, which sells Toyota-brand vehicles in Pakistan, reported a steep 76% decline year on year and 28% drop on a monthly basis, selling only 684 units in December.

Pak Suzuki sold 3,735 units, a 7% month on month increase. However, sales were 67% down year on year.

Honda Atlas Cars managed to sell more cars than Toyota with 901 units in December. It showed an 11% month on month and 56% year on year decline.

Bike sales dropped 7% month on month and 21% year on year. Atlas Honda sold 72,009 units, showing a 5% month on month and 15% year on year decline.

Tractor sales faced a 26% month on month drop in December. AGTL reported a sharp decline of 28% while MTL sales shrank by 25%.

A JS Research report said it expects auto sales may start improving in the second half of calendar year 2024. Their expectation of improvement in sales is based on the expected decline in interest rates. Low interest would bring the cost of auto financing down, therefore supporting recovery in car sales.