In July 2024, Pakistan’s automobile sector experienced a significant decline in car sales, with a 36% decrease month-over-month (MoM). This drop, attributed to pre-buying in June 2024, saw sales fall to 8,589 units from 13,284 units in June. However, the sector recorded a 60% increase year-over-year (YoY) in July 2024.
The sharp MoM decline in car sales is linked to the new withholding tax (WHT) introduced in the FY25 budget, which led to a surge in car purchases in June as buyers aimed to avoid the new tax. This rush caused a notable sales drop in July as demand naturally waned. Hyundai Nishat Motor faced the steepest MoM decline, with sales plummeting by 50% to 529 units, although it still achieved a 7% YoY increase. Toyota Indus Motor Company (INDU) saw a 44% MoM drop, with sales falling to 1,664 units, while Honda Atlas Cars (HCAR) experienced a 15% MoM decline, selling 931 units. Sazgar Engineering (SAZEW) managed to limit its decline to 5%, with 825 units sold.
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The YoY increase in July’s car sales can be partly attributed to the low base effect from 2023, when plant closures and inventory shortages limited sales. The July 2024 figures reflect a normalization of these issues and the impact of new tax regulations.
In the two-wheeler and three-wheeler segments, there was a 5% MoM decrease, with 84,993 units sold in July 2024. Atlas Honda (ATLH) led this segment with 70,255 units sold, experiencing a 12% MoM decline but a 13% YoY increase. Pak Suzuki Motors Company (PSMC) and Sazgar Engineering (SAZEW) also reported minor MoM declines of 1% and 11%, respectively.
The tractor segment faced the most severe decline, with Millat Tractors (MTL) experiencing a 63% YoY drop and a 78% MoM decline to just 605 units. Al-Ghazi Tractors (AGTL) also saw significant drops, with sales down 16% YoY and 40% MoM, totaling 855 units in July 2024. The sharp decrease in tractor sales was mainly due to pre-buying in June before the imposition of a 10% GST on tractor sales in July.
On a positive note, the truck and bus sector saw a 3% MoM increase in sales, with 307 units sold in July 2024, marking a 57% YoY growth.
