Banks’ lending to people at the lowest markup revives cars’ manufacturing sector, drives up vehicles’ demand in the country. Indus Motors alone records 48% growth in cars’ sales during Jan-March 2021.
ISLAMABAD
Car sales in Pakistan during Jan-March period of 2021 demonstrated 76 percent staggering growth amid government’s supported banks’ lending to buyers at the lowest markup in the country.
From Jan-March 2021, the third quarter of the financial year, Pakistan Automobile Manufacturers Association (PAMA) has reported sales of 54,764 cars in comparison with 31,149 vehicles’ sales in the corresponding period of 2020. Pakistan government’s initiative to offer loans to people at subsidized rates generated a positive impact on COVID-19 hit car makers in the country in 2021.
Indus Motors Company, the manufacturer of cars with the famous Toyota brand-name, has reported this positive development for car makers in its third quarterly report published recently. Pakistani car producers’ year starts from July and ends in June. According to the report, PAMA recorded 76 percent growth in sales of passenger cars and light commercial vehicles during Jan to March 2021 period.
Indus Motors alone recorded 48 percent increase in its sales of vehicles in the third quarter ending March 2021. The company sold 16,626 vehicles during Jan-March 2021 as against 11,209 units sold in the same period last year. Furthermore, in nine months of the ongoing financial year, July 2020 to March 2021, cars’ manufacturing companies reported a 37 percent increase in sales of passenger cars and light commercial vehicles, to 134,718 units. Whereas, in the corresponding period of previous financial year, car makers in the country sold 98,643 vehicles.
Indus Motors further reported 67.5 percent growth in sales of its cars from July 2020 to March 2021. During this period, the company sold 42,988 vehicles as against the sale of 25,662 units during the same period of last financial year. Meanwhile, Indus Motors manufactured the highest number of units, 42,759 vehicles during this period as against the production of only 25,982 units in the corresponding period of 2019-20.
Resultantly, Indus Motors earned 131.16 billion rupees in nine months of 2020-21, whereas, during the same period in the preceding fiscal, the company earned only 75.83 billion rupees due to depressed demand amid coronavirus. Thus, in the July 2020 to March 2021 period, the company has generated 55.33 billion rupees more revenue through increased sales of its vehicles.
In its third quarterly report, Indus Motors has pointed out that the automobile sector in Pakistan has demonstrated turnover in its business in nine months ending March 2021. Improvement in the macroeconomic environment and low markup rates have fueled cars’ demand and improved the buying power of people in the country.
Hence, towards the end of third quarter ending March 2021, the car producers in Pakistan have witnessed a substantial demand in vehicles which enabled Indus Motors to enhance its productivity to the highest level to meet growing demand. Car manufacturers in the country are optimistic that subsidized banks’ lending to consumers would further boost car sales in Pakistan in 2021.