Downfall of Automotive Sector: Cars Sales 2021 Vs. 2023
The Impact of Political and Economic Instability on Pakistan’s Automotive Sector
Political and Economic Turmoil in 2022
In 2022, Pakistan faced significant political unrest, pushing the nation to the brink of bankruptcy.
Read More: Car Prices to Increase in Pakistan in Budget 2024-25
This instability severely impacted various sectors, including the automotive industry.
To illustrate the magnitude of change, here’s a comparative analysis of car sales between 2021 and 2023, during the peak of economic distress.
Decline in Honda Sales
Honda City and Civic:
The Honda City and Civic were among the hardest hit during this period. Sales plummeted by nearly 50%.
- 2021 Sales: 25,276 units
- 2023 Sales: 12,823 units
- Sales Difference: -49%
The primary factor behind this decline was the sharp price increase.
In 2021, the Honda City was priced at 30 lacs PKR. By 2023, this had surged to 56 lacs PKR. Similarly, the Civic’s price escalated from approximately 58-62 lacs PKR to nearly 1 crore PKR.
Suzuki Swift’s Surprising Surge
Suzuki Swift:
Contrary to the general trend, the Suzuki Swift saw a remarkable increase in sales, driven by the introduction of a new generation model and its affordability relative to other cars.
- 2021 Sales: 2,316 units
- 2023 Sales: 9,338 units
- Sales Difference: +303%
The Swift’s new model launch in 2021 and its lower price point compared to the Honda City and Toyota Corolla contributed significantly to this surge.
Toyota Yaris and Corolla: Major Decline
Toyota Yaris and Corolla:
Sales for the Yaris and Corolla also suffered greatly due to economic challenges.
- 2021 Sales: 46,650 units
- 2023 Sales: 18,838 units
- Sales Difference: -60%
Initially marketed as budget sedans, the substantial price hikes of nearly 80% rendered them less attractive to buyers.
Hyundai Elantra: A Value Proposition
Hyundai Elantra:
The Elantra experienced positive growth, becoming a more attractive option as the prices of its competitors rose.
- 2021 Sales: 855 units
- 2023 Sales: 2,162 units
- Sales Difference: +153%
Initially considered expensive, the Elantra’s value became apparent as the Corolla’s price matched its own, offering better value in terms of engine size, comfort, and features.
Decline in Suzuki Cultus and WagonR Sales
Suzuki Cultus:
- 2021 Sales: 23,169 units
- 2023 Sales: 6,956 units
- Sales Difference: -70%
Once a budget-friendly option, the Cultus’s price increase from 26 lacs PKR to 38 lacs PKR in two years made it less accessible to its target market.
Suzuki WagonR:
- 2021 Sales: 23,131 units
- 2023 Sales: 5,434 units
- Sales Difference: -77%
WagonR, popular for ride-hailing services, saw a dramatic drop in sales due to its price hike, leading consumers to opt for used models or switch to the more affordable Alto.
Suzuki Alto: Most Popular Yet Declining
Suzuki Alto:
Despite being the top-selling car in 2023, the Alto’s sales were still 50% lower compared to 2021.
- 2021 Sales: 71,198 units
- 2023 Sales: 35,379 units
- Sales Difference: -50%
The price increase from 14-16 lacs PKR to 23 lacs PKR for the base variant made it less affordable, even though it remained the most popular car.
Market Trends and Outlook
In May 2024, Pakistan’s vehicle market showed signs of recovery with 10,850 new sales, marking a 96.5% growth. Year-to-date sales reached 50,678 units, up by 38.8%.
Brand-wise Sales:
- Suzuki: 25,546 sales (+82.7%)
- Toyota: 10,615 sales (-3.1%)
- Honda: 7,234 sales (+32.3%)
- Hyundai: 4,066 sales (-9.1%)
- Haval: 3,199 sales
Top Models:
- Suzuki Alto: Best seller with a 209.7% year-on-year increase.
- Toyota Corolla: Sales up by 72.2%.
Medium-Term Market Trend in 2024
The Pakistani automotive industry remains heavily impacted by high import duties and reliance on a few foreign manufacturers.
Despite a record high in 2018, the market has faced significant declines due to increased taxes, COVID-19 restrictions, and the 2022 floods, which devastated the country and its vehicle industry.
2022 Sales Impact:
- Total Sales: 231,248 units (-4.8%)
2023 Sales Trend:
- YTD Sales: 81,587 units (-63.7%)
Conclusion
The economic and political instability in Pakistan has dramatically reshaped the automotive market. While some models like the Suzuki Swift and Hyundai Elantra have seen growth, others like the Honda City, Civic, and Suzuki Cultus have faced steep declines. The market outlook remains uncertain, with future sales likely dependent on economic recovery and stabilization efforts.
Your Thoughts: How do you view the current state of Pakistan’s automotive market? Share your insights in the comments below.
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