KARACHI - The motor cars' import growth has declined by -61.59 per cent during the four months of the current fiscal (July-Oct, 2008). Similarly, the import in overall transport group witnessed downward trend by depicting negative growth of -57.52 per cent during the same period.
Pakistan spent a total of $35.417m on the import of four-wheeler during July-Oct, 2008 against $92.206m or Rs5.583m in the corresponding period of last year. It is important to mention here that the small cars were used to constitute more than 50 percent of the overall road motor vehicles imports but on the back of widening external current account imbalances, increase in the custom duties on car imports, hike in the domestic interest rates with the tightening of monetary policy and depreciation of the Pak rupee against the US dollar and other major currencies had adversely affected the import flow of CKD/SKD and CBU motorcars in the country during July-October FY09.
Market experts are of the view that the high cost of car financing and unstable political situation along with rising costs due to increasing steel prices during the period under review had also impacted the gross profits of the auto industry.
The official figure indicates that import of road motor vehicles including Build Unit, CKD/SKD dipped by -17.91pc, showing negative growth by spending $ 361.155m on auto imports in July-October FY09 from $ 439.940m during same period of FY08. In the month of October 2008, the import of motorcars in Build, CKD/SKD category down by 24.44 percent as the country spent $4.289m versus $23.464m during the course of October 2007. Country spent $70.916m on the import of CBU category which showed a decline of -52.69pc during July-October, 2008 while the amount of $149.907m had been spent on importing CBUs during July-OctFY09.
According to PAMA, profits of the four major car assemblers in Pakistan (Indus Motor, Pak Suzuki, Honda Atlas and Dewan Farooq) plunged drastically from Rs1, 440m in Jul-Sep 2007 to a loss of Rs342m. Although, Pak Suzuki Motor Company and Indus Motor Company earnings declined sharply. The period saw a massive decline in the profitability of the auto assemblers as the four companies posted a loss of Rs342mn compared to Rs1,440mn in Jul-Sep 2007. Volumetric sales fell by 44.7 percent in the period under review, hence, net sales of the industry stood at Rs16,798m versus Rs27,894mn in Jul-Sept 2008, showing a fall of 39.8pc.