April 2020 proved to be the worst month for the automobile manufacturers in Pakistan as not even a single car was sold as an impact of the rapid and tremendous blows of Covid-19.
The lockdowns implemented by the federal and provincial governments to stop the chaotic destructions of Covid-19 left the automotive plants in the country with almost no business.
All the key players in the automotive industry took the dip and recorded an unmatched downfall in sales, bringing them down by almost 52pc YoY.
Honda's sales went down by 64pc YoY, followed by Indus Motors and Pak Suzuki Motors Company that recorded a drop of 54pc YoY and 47pc YoY, respectively.
As things went from worse to better, the automotive industry is also gaining momentum. The automotive industry of Pakistan has seen more newcomers this year than any of the previous years combined. The industry experts have predicted an increase of 60pc in the sales of cars in the financial year 2021.
Syed Fawad Basir, the senior research analyst at Topline Securities Limited, said,
"Faster than expected economic recovery and lower interest rates shall be the two key factors in the increase in sales of vehicles across the country."
He further added,
"After taking into account the higher-than-expected unit sales in the first four months (July-Oct) of FY21 and an upward revision in margin assumptions, we are revising our earnings forecasts for the Pakistani automobiles' universe for the next two years by up to fifty-three percent,"
According to the details shared by the State Bank of Pakistan, that the automobile loans depict an increase from Rs.251 billion in March 2020 to Rs. 270 billion in October 2020.
Sharing his detailed researched insights about the industry's major players, Faisal Basir forecasted the upcoming rise in sales for FY21 for each of them in the following manner.
Toyota Indus Motor Company Limited is expected to see a growth of anywhere between four to fifteen percent in earnings during FY21-FY22, mainly because of Yaris's enormous success.
Honda Atlas Cars are expected to witness a growth of three to fifty-three percent.
For Pak Suzuki Motors, he predicted that the company would grow at a steady pace.
As the first quarter of FY21 comes to an end, the automotive industry witnessed a 2.7 percent rise in vehicle sales but a 24 percent fall in production.
That's positive news for the automotive sector of Pakistan and would benefit the economy tremendously. With new entrants becoming part of the industry, the automotive industry is positively on the brink of a significant paradigm shift.
