Automobile sector contracted by 7.6pc during Jul-Mar FY19: SBP report
The downslide in automobile sector became more noticeable during Q3-FY19.
KARACHI (Web Desk) - Automobile sector in Pakistan sector contracted by 7.6 percent during Jul-Mar FY19 compared to an impressive growth of 18.9 percent during the same period last year, the State Bank of Pakistan (SBP) reported in its Third Quarterly Report 2018-19.
According to report, the downslide in automobile sector became more noticeable during Q3-FY19 compared to the previous two quarters.
Policy measures like regulatory restrictions prohibiting nonfilers from purchase of vehicles, and increase in interest rates dented the demand in the automobile segment to some extent. Furthermore, significant depreciation of PKR increased the cost of production, resulting in escalated prices and dampening the demand further.
The severity of dip in economic activities, especially agriculture incomes, was more evident in tractors and motorcycles (mainly rural demand) and commercial vehicles that showed double-digit contraction in growth.
"The car segment managed to grow by 5 percent during Jul-Mar FY19, benefiting largely from earlier bookings which partially diluted the impact of regulatory restrictions (especially on non-filers). The delivery times were 6-9 months for certain popular variants until June 2018, before the enforcement of regulatory measure requiring buyers to be active tax filers. The impact of earlier bookings lasted till December 2018," the report added.
Subsequently, the production of cars contracted by 12 percent in Q3-FY19, compared to a growth of 4.6 percent in H1-FY19. Besides, the stringent imported used-car policy also helped in diverting consumers towards domestically produced cars, evident from reduced influx of imported used cars during FY19.
