Car Sales In Pakistan Break New Record
http://www.carmudi.pk/journal/car-sa...ak-new-record/
Ever since the introduction of lease and financing for automobiles by the Pakistani banks, the car ownership is increasing by leaps and bounds. Musharraf government from the early 2000s should take credit for introducing this financial amendment to our society which has resulted in increasing prosperity. Not only did personal vehicle ownership started to grow, new ventures which were solely based on cash-flow also sprouted up. For example renting a car which was already financed and using the rent money to pay the car became one of the most successful business models in Pakistan.
After The Boom Comes The Bust
This situation continued till mid-2006 but then came the global financial crisis which tanked the economies of US, Japan and several European countries. Big American banks such as Bear Stearns and insurance companies such as AIG (which were Manchester United’s sponsors at that time) folded up over night and were nationalized. The UK saw one of its first bank runs in more than a century when Northern Rock declared bankruptcy and was consequently nationalized.
US Auto Industry Shutdown
As a result of the financial markets collapse, which in fact was caused by real estate markets collapse, the US Auto industry suffered an instant meltdown. The Big Three (Ford, GM and Chrysler) all suffered so much losses that they had to be taken under government custodianship and were part of the largest bailout in the history of automotive industry. With high gas prices and a weak US economy, the Japanese economy tanked as well and Toyota saw a double digit decline in its growth for the first time in its history. Honda exited the Formula One race in 2008 citing problems with the funding.
The Situation Starts To Improve
The global situation starts to improve around 2012 and the economy starts to pick up. By 2013 the recovery is complete and the automobile crisis is over. Toyota, Ford, VW and Fiat post huge record profits. The situation in Pakistan starts to improve as well as the lending rates start going down and the financing conditions ease up. The car ownership starts to increase once more.
Car Sales Set New Record In 2015
According to the Nation, the car sales have not been as high as now since the last five years. Pakistan Today confirms this opinion and says that the number of units sold in the year 2014-2015 is more than 150,000 which is a 30% increase from the sales last year. One of the major factors for the increase in sales is certainly the new Toyota Corolla 2015 model release for which people had been waiting for more than two years.
Suzuki Bolan Tops The Charts
Another thing which increased the sales was a self-employment scheme launched by the Punjab government which facilitated the applicants in buying Suzuki Bolan vehicles. As a result of this the sales for Suzuki Ravi and Suzuki Bolan almost doubled.
State Bank Plays Its Role
The SBP played its role in greasing the moving wheels of Pakistani economy by lowering the interest rates from 10% to 7%. The 3 point decrease was enough to motivate the people sitting on the fence to jump into the fray and buy new cars. All in all a mixture of different factors ensured that the automobile industry set a new record for sales and registered a year on year growth of 30%.
: Hinopak Motors profit rises to Rs381m
KARACHI: Hinopak Motors – the largest bus and truck-maker in Pakistan – has posted an after-tax profit of Rs381 million in the first quarter ended June 30, 2015 compared to Rs268 million in the same quarter of previous year. Earnings per share (EPS) jumped to Rs30.75 from Rs21.65.
The company had announced a considerable net profit of Rs1.07 billion in the financial year ended
March 2015 compared to Rs624 million in fiscal year 2014.
It is continuously consolidating the position, registering profits for the last five years, but fiscal year 2015 was the most noticeable in terms of earnings.
Hinopak, in its annual report for 2015, said the outlook for automobile industry was likely to remain challenging as new entrants would strive hard to grab the market share.
However, it added, positive social and macroeconomic factors would play a vital role in delivering a strong performance in the year ahead.
“Consistent government policies with a long-term vision are essential for the growth of auto industry. Despite various challenges, the management is confident that the company will maintain its market leadership,” it said.
Published in The Express Tribune, July 24th, 2015.
