KARACHI: Auto sector ended 2019-20 on a dismal note as production and sales of various vehicles suffered declines in the range of 23-55 per cent.

Production and sales of cars plunged 55pc and 53.5pc to 94,325 units and 96,455 while those of two/three-wheelers by 23pc to 1.370 million, respectively.

The low annual car figures were led by sales and production grinding to a halt during April on account of lockdown to prevent spread of coronavirus even as the sector staged a recovery in volumes during May at 3,800 units and June 7,325.

Output and volume of trucks were down by 51pc and 47pc to 2,945 and 3,088 units in FY20 while bus production and sales dipped by 42pc and 40pc to 3,477 and 3,647, respectively.

Farm tractors’ production and sales fell by 35pc each to 32,608 and 32,727 units in FY20.

Month-on-month recovery seen in May and June

Total output and volume of jeeps tumbled by 53pc and 55pc to 3,564 and 3,459 units while pickups saw corresponding decrease of 51pc and 52.5pc to 12,068 and 12,048 units, respectively.

While many assemblers had started rolling out vehicles from May after easing of lockdown, Pak Suzuki Motor Company Ltd took a late start. As a result, the production of WagonR remained “nil” from April to June, while that of Suzuki Swift, Cultus, Alto and Bolan also stood “zero” from April to May.

Despite closure of units during lockdown and thin demand, car assemblers pushed up prices of Toyota Yaris, which came down in the assembly line on Indus Motor Company (IMC) from May with output and volumes of 389 and 167 units, before rising to 1,033 and 1,160 in June. Yaris had replaced Toyota Corolla 1,300cc.

IMC also raised prices of various Toyota vehicles by Rs110,000-500,000 while Honda Atlas Cars also jacked up rates by Rs60,000-120,000.

Few days back, Pak Suzuki Motor Company pushed the Alto 660cc VX model price by Rs63,000 to Rs1.198m.

Prior to lockdown (from July 2019 to mid-March 2020), car assemblers continued giving multiple shocks to consumers by raising rates multiple times on rising cost of imported components due to rupee devaluation.

Similar trend was also followed by the bike assemblers. Association of Pakistan Motorcycle Assemblers Chai­r­man Mohammad Sabir Sheikh said 70cc bike prices were raised by 10pc while 125cc-150cc recorded jump of 25-30pc in the last one and a half years owing to weakening exchange rate.

“There is no relief in the Budget FY21 relating to duties and taxes for the two-wheeler segment which is the main mode of transport for low-income groups,” he said.

In two-wheelers, the market leader Atlas Honda Ltd made an impressive recovery in production and sales with 90,844 and 90,039 units in June, from 12,136 and 12,106 in May to conclude the FY20 at 873,474 and 873,902 units versus 1.116m and 1.114m units in FY19.

Among heavy vehicles, production remained suspended during April to May.

Tractor production and sales kept rolling from April to June after getting permission from the government in view of the wheat harvesting season in Sindh and Punjab.

Pakistan Automotive Manufact­urers Association Director General Abdul Waheed Khan said Covid-19 has proved disastrous for the auto sector from April onwards when sales, especially of cars, were already reeling down by 40-50 per cent. High interest rates of 13.25pc till mid-March also restricted buyers towards purchasing of new vehicles.

Published in Dawn, July 14th, 2020