Car sales increase in Pakistan despite high prices, economic challenges

In a surprising turn of events, the soaring prices of cars in Pakistan have not deterred buyers, as car sales experienced a notable uptick in February 2024.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA), car sales edged up by 1.94 per cent, reaching 7,953 units, compared to 7,802 units recorded in January 2024.

This positive momentum follows a robust performance in the preceding month, where car sales hit their highest mark since December 2022.

Analysts attribute this continued growth to the momentum generated by the new year, which has carried over into February.

Year-on-year comparisons reveal a substantial increase, with car sales spiking by 2.18 times compared to February 2023, when only 3,642 units were sold.

However, despite this recent surge, cumulative sales for the first eight months of fiscal year 2024 stand at 46,417 units, marking a 40.93 per cent decline from the same period last year.

Similarly, the production of passenger cars has witnessed a significant downturn, with 8MFY24 recording 48,402 units, reflecting a 40.84 per cent decrease compared to the previous fiscal year.

In February alone, production plummeted by 16.77 per cent month-on-month, totaling 8,002 units, down from 9,614 units in January 2023.

Nonetheless, on a year-on-year basis, production saw a remarkable surge of 69.97 per cent, indicating a shift in manufacturing trends.

Despite these fluctuations, the automotive landscape faces challenges, notably with Pak Suzuki Motor Company announcing two price hikes within a span of ten days in response to increased sales tax.

The repercussions of these adjustments on sales are anticipated to unfold in the coming weeks, as the market adapts to the new pricing structure.