Pakistan’s passenger cars’ sales surge 8.6% in August

Pakistan’s total passenger cars’ sales in August 2024 surged 8.6% to 6,417 units as the declining interest rates have reduced financing costs reviving demand.

In the first two months of the current fiscal year, passenger cars’ sale stood at 12,274 units, up 27.7% compared with 9,611 units sold in the same period last year.

Muhammad Abrar, an analyst at Arif Habib Limited, attributed increase in sales to low financing cost and stable rupee. “The central bank has reduced the interest rates and more cuts are anticipated, which has reduced the financing cost.”

Abrar said the increase in sales was in line with market expectations and demand would revive gradually. “Stable local currency also contributed to higher demand since the car prices have been stable during the period.”

It may be mentioned that the State Bank of Pakistan has slashed the interest rates in two successive monetary policies from 22% in June to 19.5% presently.

Highest increase was noted in 1300cc and above category, which surged 44% to 3,330 units in August 2024 compared with 2,310 units in the same month last year. However, sale of 1,000cc vehicles declined 52% to 321 units compared with 664 units last year. Car sales in the below 1,000cc category also declined 5.7% to 2,766 units in August 2024 compared with 2,935 units in the same month last year.

The downturn in demand of lower category vehicles is due to prevailing economic conditions, still higher interest rates, higher duties and taxes, limited auto finance availability and low consumer purchasing power.

Sales of LCVs, Vans and Jeeps during August 2024 stood at 2,282 units, up 36.7% compared to 1,670 units in the same month last year.