Before the division, India and Pakistan were one nation; they had much in common. It is well recognized that the two nations are comparable in terms of language, weddings and festivals, fashion trends, food and cuisine, and other areas.
But development and economics are beginning to build a big rift between the two. GDP won't be covered here, but even in the case of car sales, the differences are becoming more noticeable. India's automobile market is far bigger than ours, but things haven't always been this way from the beginning.
Car sales in Pakistan are still falling, while the Indian auto industry is growing. October 2023 will go down in history as the lowest sales month for the local car industry, with only 4,850 vehicles sold. Compared to 6,410 units sold in September 2023, this is a 24.34% month-over-month (MoM) decrease and a 56.42% year-over-year (YoY) decrease, since over 11,129 units were sold in October 2022. Not to mention that October 2022 statistics have already sustained significant dents.
In contrast, India had a 16.3% YoY increase in new automobile sales, from 336,679 units in October 2022 to 391,472 units in October 2023. Additionally, this was India's highest-ever monthly automobile volume recorded. In contrast, sales figures for October in Pakistan amount to only 1.2% of the total number of automobiles sold in India during the same period. Furthermore, far more is sold in a single month across the border than the combined sales of all automakers in Pakistan, which have never even reached 300,000 units annually.
Car sales in India have mostly been driven by the country's size, the presence of several foreign manufacturers, the country's developing economy, and the enormous spending power of its people, especially the younger population. Furthermore, the growing income and purchasing power of young Indians is causing a significant upheaval in the luxury automobile market in India. In recent years, automakers like Lamborghini, Mercedes-Benz, Audi, and BMW have had record sales in India.
India is currently the third-biggest market for automobile sales, surpassing Japan, and manufacturers are aiming for record-breaking sales in India by 2023. Sales are increasing even as the year's conclusion draws near because of the joyous occasions and tantalizing discounts that automakers provide.
Conversely, declining domestic automobile sales in Pakistan are a result of growing car prices, the country's population's declining purchasing power, and unfeasible auto loan terms. For many, even financing a car is out of the question. For instance, a buyer purchasing a base Peugeot 2008 crossover with a 1.2L engine must put down a sum of Rs 39.0 lac and then pay over Rs 216,000 a month for eighteen months. Not to mention, the amounts listed above do not account for the costs of freight, insurance, and a tracker, which might raise the whole amount by a further Rs 200,000.
The monthly payment for a 1.2L crossover is a lot more than most Pakistani CEOs make in salary. Consider the consequences of choosing more costly cars or SUVs. In order to increase sales, the government must devise a comprehensive, long-term plan that addresses many issues beyond simply providing tax cuts and incentives to automakers. Car sales are not going to rebound unless economic stability and public spending power are restored.
Analysts had already projected a dismal performance in automobile sales for the fiscal year 2024, with a further 14% decline expected. current indicates that sales may drop to about 4,000 units by the end of current fiscal year, which would be concerning if they had fallen to less than 5,000 units per month (for PAMA member businesses) in October.
Last year, IMC CEO Ali Asghar Jamali issued a warning, stating that certain manufacturers may be forced to withdraw from the market if the precarious circumstances continue. Unfortunately, sales have declined even more sharply since Jamali made these remarks in November of last year. For any market, figures of less than 5,000 units per month are quite alarming. All we can do is hope for a miracle to work in our favor or for things to become better.