Auto sales surge 215% in May amid ease in Covid restrictions

KARACHI: The automobile sales registered a whopping 215 percent growth in volumes to reach 20,311 units in May 2021, compared with 6,454 units sold in the corresponding period of the last year, in the wake of the lockdown in May 2020.

Cumulatively, the volumes rose 62 percent during the 11 months of FY21.

“The massive surge in the overall volumes is due to the low base effect, amid imposition of the countrywide lockdown in May 2020,” Ali Abdullah at Pearl Securities said.

The sales of passenger cars posted a huge growth of 240 percent YoY to 12,934 units in May 2021.

Tractors witnessed triple-digit growth of 120 percent with 4,211 units sold, pickup sales surged 174 percent to 1,778 units, and truck sales increased 375 percent to 361 units in May 2021. Jeeps sales were also rose considerably with 993 units in May 2021 as against 77 in May last year.

Analysts expect the automobile industry volumes to grow significantly on account of stable interest rates and the entry of new models. Further, the government has announced a relief package to boost the agriculture sector, which will further lift up the sales of trucks and tractors.
Additionally, the launch of Honda City’s new generation and reduction in the sales tax from the existing 17 percent to 12.5 percent on the 850cc category will contribute to more people affording below 1000cc cars.

“In the Federal Budget FY22 announcement, FED was removed (previously 2.5 percent) and sales tax was cut from 17 percent to 12.5 percent on cars up to 850cc. This mainly benefits Suzuki Alto among the listed players. Provided the company passes on the tax relief to [the] customers by way of reduced prices, we expect the small car segment to spearhead growth in auto volumes in FY22,” Ahmed Lakhani at JS Global Capital said.

On a sequential basis, the cumulative sales reported a decline of 8 percent to stand at 20,311 units in May 2021, compared with 22,067 units sold in April 2021. During the period, the sales of passenger cars recorded a downward trend of 10 percent to stand at 12,934 units as against 14,435 units in April.
Similarly, the sale of jeeps also declined 10 percent with 993 units. Tractors and bus sales also diminished 6 percent, and 33 percent, respectively, in May 2021.

Likewise, pickup and truck sales inched up 5 percent and 28 percent on a sequential basis in May 2021.

“The sales during the month notched down due to the 10 days Eid holidays. Furthermore, people were reluctant to buy new vehicles during the month of May 2021, as they were expecting a decline in car prices in the budget announcement,” Abdullah said.

Pak Suzuki Motor Company (PSMC) sales stood at 82,926 units in the 11 months of FY21. All the segments of PSMC registered growth during the period, where the sales of Alto (36,504 units), Cultus (15,240 units), and Wagon R (11,805 units) maintained the company volumes. On a yearly basis, PSMC sales in May 2021 reached 8,307 units, where Alto contributed the most, adding 3,375 units. However, on a monthly basis, PSMC sales went down 3 percent, reaching 8,307 units in May 2021, compared with 8,606 units sold in April 2021.

Indus Motor Company (IMC) sales maintained the surging momentum and also remained a key contributor for the industry, as overall volumes increased 104 percent to reach 52,710 units, compared with 25,847 units sold in the eleven months of FY20.

Similarly, on a yearly basis, Indus Motor reported a significant increase of 7.56 times with 4,685 units in May 2021. Yaris (2,099 units) and Corolla (1,514 units) were the major supporters. During May 2021, the company’s sales sunk 13 percent due to the weak sales of Corolla and Yaris, down 12 percent and 19 percent, respectively, as against (1,724/2,600 units) in April 2021.

On a cumulative basis, Honda Atlas Cars (HCAR) sales experienced a growth of 81 percent with 25,986 units as against 14,384 units in the 11 months of FY20. HCAR’s sales went skyward 5.14 times to clock in at 2,001 units in May 2021, where Civic and City were the major contributors, reaching 1,581 units.
On a monthly basis, the total sales went down 13 percent against 2,287 units on the back of Civic and City sales, which deducted 472 units in May 2021.

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