Commercial vehicle (CV) sales are a popular barometer for economic activity in the country. When domestic businesses are booming, and international trade is flourishing, commercial vehicles sales are robust. Couple that with the CPEC excitement in infrastructure development and logistics that promised to bring demand for 20,000-60,000 more trucks in transit every day—the potential for CV sales seemed huge. Of course, that excitement has now been replaced with a ready trepidation about survival as the government prepares to put out the fires and cool down the economy. CV sales are embodying this shift.

In the ten months to the fiscal year, pickups and trucks sales have declined by 18 percent while bus sales have been strong. This is in line with expectations (read: “CPEC optimism on hiatus, March 18, 2019). Trade deficit during the period has fallen by 13 percent as imports have been forcedly brought down. What’s interesting is that despite currency devaluation over the past year which has otherwise wreaked havoc to the economy at large has done little to make exports more attractive abroad. Exports registered a zero percent growth in 10MFY19, but that is a discussion for another day. Cross-border trade with India and Afghanistan has slowed down with a near halt with India on account of the hefty duties the country has imposed on Pakistan’s goods.

One thing to note is that PAMA data does not show numbers for players like FAW that are not part of the association but which do have a piece of the proverbial pie in terms of commercial vehicle market share. However, the current numbers do include new pickups launched like Isuzu’s D-Max or JAC motors which still do not bring sales at par with last year.

If one were to extrapolate, the decline to truck sales of 34 percent in 10M will land total volumetric sales on the edge of 5000 annual units, taking the sector back at least three years back into FY15. Meanwhile pickup sales at the current rate will stand at 25,000 units walking back into the FY14 era. Do these trends put a dampener on the countless plans of new commercial vehicle players entering the market space? From Chinese players like Changan that recently showcased its new vehicles at an auto show in Karachi to JW Forland that has investment plans to the likes of Volkswagen and Mercedes-Benz which want to launch trucks in Pakistan. If the total market size reduces, the share each player gets will get smaller. It seems the market will remain at this level, whether new players arrive or not. If they do, they will just have to deal with a considerably tough start.