Islamabad: The top three auto assemblers in Pakistan are expected to see a significant 78% increase in sales volumes year-over-year in July 2024, driven by a recovery from last year's low production levels due to prolonged plant shutdowns. However, month-over-month sales are projected to drop by 30%, indicating a pause in the auto recovery cycle seen in the previous fiscal year.
According to JS Global, the decrease is attributed primarily to INDU, which is expected to see a 43% reduction in sales volumes, followed by PSMC and HCAR with 27% and 11% drops, respectively. The slowdown is linked to consumers accelerating purchases ahead of new budgetary measures affecting the auto sector. Despite the monthly decline, the introduction of new hybrid and electric vehicles, particularly by Chinese manufacturers, suggests a shift in industry dynamics, favoring more sustainable and feature-rich models at competitive prices.
The future of the auto sector appears cautiously optimistic, with expectations of a modest recovery in FY25 based on a very low base effect from FY24. However, challenges such as the dependency on foreign currency, new regulatory measures, and the need for improved EV infrastructure remain significant hurdles. The auto sector's adaptability and the introduction of new models, like HCAR's upcoming HEV variant of the HR-V, are critical to sustaining growth and market share in a rapidly evolving market.