Automakers fear major drop in rural sales ‘due to flooding’ – Business

KARACHI: After slumping sales in July, auto assemblers are painting a grim demand scenario in the coming months due to flash floods in various rural parts of the country that have destroyed standing crops and producers’ homes.

A large volume of motorcycles and four-wheeled vehicles are sold in rural areas where small and large producers earn their living from various crops.

Road Prince Motorcycle CEO Sohail Usman says sales of Chinese assemblers’ bikes have been depressed in recent months due to high prices and could drop at least 50% in sales over the same period. Last year.

He said a large number of buyers in rural areas would not be lifting new bikes due to the already steep rise in the cost of living, adding that the real impact would be more visible in the next two to three months. .

Pakistan Motorcycle Assemblers Association (APMA) chairman Mohammad Sabir Sheikh said about 50 pieces of two-wheelers have been sold in rural areas. The floods reportedly destroyed standing crops of vegetables, cotton, bananas, etc.

Additionally, farmers are also storing wheat for future consumption and the floods have washed away their main food staple.

As soon as the situation improves, people affected by the floods will buy food first and resume construction of their houses depending on government assistance instead of focusing on buying automobiles, which which would slow overall auto sales over the next two months.

Mr Sheikh said rural buyers would be reluctant to buy a new bike given the devastation to the road network, which can take months to repair.

According to an analyst briefing held in the last week of May, the share of rural purchases in total sales of Pak Suzuki Motor Company Ltd (PSMCL) is 40%.

PSMCL public relations manager Shafiq Ahmed Shaikh told Dawn that much of the sales will be affected due to the recent flooding. “We expect the government to also consider relief for the automotive sector.”

A Korean car assembler said a dire situation arose after the floods and there would be a significant impact on sales. He said plantings of all kharif crops would be delayed in addition to impacting farmers’ incomes.

An official from Honda Atlas Cars Ltd said their sales were majority in urban areas.

According to Topline Securities, total car sales, including non-members of the Pakistan Automotive Manufacturers Association (PAMA), reached 14,000 units in July, down 59% month-on-month and 52 % year over year due to production issues. price, low purchasing power of people and less working days due to Eidul Azha holiday.

Overall two- and three-wheeler sales fell to 96,162 units in July from 145,197 in the same month in 2021. Honda, Suzuki and Yamaha sold 80,067, 3,512 and 1,261 units respectively in 1MFY23 from 100,002, 2,715 and 1,607 units from a year ago.

Posted in Dawn, August 28, 2022

Comments are closed.