Pakistan sees 56% drop in car sales in first half of FY2023-24

The Pakistan Automotive Manufacturers Association (PAMA) has reported a substantial 55.55% year-on-year decline in passenger car sales during the first half of the fiscal year 2024, revealing the industry's ongoing challenges.

Faced with a myriad of obstacles, including escalating inflation, currency depreciation, weakened demand, and political uncertainty, the automotive sector is now contending with additional disruptions in the supply chain.

The latest data from PAMA highlights a significant downturn in passenger car sales, plummeting to 30,662 units in 1HFY24, compared to 68,912 units in the corresponding period of the previous fiscal year.

Despite a marginal 0.84% month-on-month uptick in sales, the sector experiences a sharp 64.33% year-on-year decline compared to figures from December 2022. Production figures mirror this trend, revealing a 56.87% year-on-year drop in the total production of passenger cars, reaching 30,786 units in 1HFY24.

The industry's challenges are further exacerbated by issues such as a shortage of dollars impacting the import of crucial car parts and raw materials. Major players like Honda and Suzuki have been forced to temporarily halt production due to these disruptions in the supply chain.

Despite efforts by the State Bank of Pakistan (SBP) to ease import restrictions, the auto sector continues to grapple with constraints on essential parts, hindering production capabilities. Competition for attention from the SBP is fierce, with sectors like medicine taking precedence.