Pakistan's Growing Middle Class Drives Motorcycle Sales Boom

[Riaz Haq]

Pakistan's fiscal year 2015-16 saw production of motorcycles soar to a new high of over 2 million units. This represents a 16.5% surge from last year.  At the same time, passenger cars and light trucks sales rose to over 200,000 in fiscal 2016, a 20% jump over the same period last year.

Motorcycle Sales:

Rising motorcycle sales in Asia's developing nations like Pakistan are seen as a barometer of expanding middle class. It is, in part, attributed to rising incomes and availability of bank financing at historic low interest rates in the country.

As many as 2,071,123 motorcycles were manufactured during July-June (2015-16) compared to 1,777,251 units during July-June (2014-15), according to the latest data released by Pakistan Bureau of Statistics (PBS) and reported by Pakistani media.

Pakistan is the World's Sixth Largest Motorcycle Market

Car Sales:

In addition to the double digit increase in motorcycle sales, Pakistan also experienced 20% jump in sales of passengers cars, light commercial vehicles (LCVs), vans and jeeps. The total sales of local vehicles increased by 21% to 216,568 as compared to 179,953 units sold in FY15, according to industry data.

Auto Parts Industry:

Rising auto and motorcycle sales are helping boost Pakistan's auto parts industry as well. “We are getting orders and the pace is increasing,” said Sultan and Kamil International CEO Faisal Mahmood speaking to Pakistani media on the sidelines of the 12th Pakistan Auto Show 2016 held at the Lahore International Expo Centre. Mahmood’s company makes more than 350 automotive parts and exports to all major automobile markets in the world.

Other Growth Industries:

Among other industries seeing significant growth are pharmaceuticals (6.54%), cement (17.01%), chemicals (8.13%), non metallic mineral products (10.02%), fertilizers (13.81%), leather products (7.76%) and rubber products (7.16%), according to media reports.

Summary:

Pakistan's economic recovery is in full swing with double digit growth in multiple industries, including auto, pharma, chemicals, cement, fertilizers, minerals, etc.  It is expected to pick up steam over the next several years with new investments on the back of China-Pakistan Economic Corridor related projects.

Related Links:

Haq's Musings

Growing Middle Class in Pakistan

Rising Energy Consumption

China-Pakistan Economic Corridor

Pakistan's Thar Desert Sees Development Boom

Gwadar vs Chabahar Ports

[Riaz Haq]

Bilal I Gilani
@bilalgilani
Poverty picture based on World Bank data

Don't believe the gloom spreaders

If you have one foot in US , every day you try to justify your exit by dissing Pakistan

Facts belie your gloom story

Long way to go but Pakistan is progressing

https://twitter.com/bilalgilani/status/1496405609096351746?s=20&...

(Graph shows poverty declining from 64% in 2001 to 40% in 2008 and 21.9% in 2018) 

[Riaz Haq]

Vehicle Sales in Pakistan

https://minutemirror.com.pk/speedy-recovery-33561/

In the first eight months of the current financial year (July 2021-February 2022), the automobile industry sold cars at a record pace and car sales went up by a record 57 per cent. According to the data released by the Pakistan Automotive Manufacturers Association, 149,813 vehicles were sold in the first eight months of the current financial year as against 95,139 units in the same period of the previous financial year. The breakup of the sale data tells interesting tales: of the sold vehicles, car sales accounted for 57.5 per cent, truck sales for 82.2 per cent, jeep/pickup sales for 51.5 per cent and farm tractor sales for 6 per cent during the period. However, the sale of motorcycles and rickshaws declined by 3%. Car sales are likely to continue to rise till the end of the current financial year. The increased sale of trucks shows the revival of economic activities across the country. Farm tractors’ sale figures are also encouraging as the agriculture sector has seen an unprecedented boom, thanks to the farmer-friendly policies of the government. The figure strengthens the government’s claims of economic recovery.

This has happened at a time when car prices have increased multiple times, and the opposition has been protesting inflation. The figures of car sales have puzzled many and they may scramble the main reasons for the increase in car sales when people are worried about inflation.

According to experts, the main reason for the vehicle sale is the single-digit rate trade and macro recovery, which played a significant role in increasing auto sales in the first eight months of the current financial year. The increase in the purchase of such necessities of life, which are considered luxuries in Pakistan, is not a sign of the recovery or improvement of the economy, but the recent figures on car sales establish the fact that the purchasing power of a certain class has increased multiple times. The increasing gap between the rich and the poor makes it hard for social scientists to determine the overall rate of poverty.

These figures are, however, welcome for the automobile sector, which went through troubling times in the last three years. Several plants had to close down operations and lay off the staff. However, the life of the common man may remain the same as their purchasing power has shrunk. The government needs to take concrete steps for the welfare of the people.

[Riaz Haq]

Bilal I Gilani
@bilalgilani
Pakistan produced 2.4 million motorcycles last year

200k in a month 8000 in a day 1000 every hour

https://twitter.com/bilalgilani/status/1535717946273804299?s=20&...

--------------

Bilal I Gilani
@bilalgilani
In one decade motorcycle on road increases from 5 million to 25 million !

https://twitter.com/bilalgilani/status/1535718216215011328?s=20&...

[Riaz Haq]

PAAPAM opens Pakistan's largest automotive Expo 2022 in Lahore

https://dailytimes.com.pk/974390/paapam-opens-pakistans-largest-aut...

Pakistan Auto Show 2020 Chief Organizer and PAAPAM former chairman Syed Nabeel Hashmi said “Pakistan Auto Show 2022 is setting new benchmarks and trends for the automotive industry. Today, this mega event attracts more than 100,000 visitors from all over Pakistan and internationally. Over 200 international buyers and well over 100 international visitors will be attending the largest auto show in Pakistan.” The government needs to prepare long-term plans and support industries accordingly. The Chairman of Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) – Capt. (R) Muhammad Akram stated that: People are passionate about seeing the latest revolutionary technologies being deployed in Pakistan. Some of the participants this year include global automobile brands, along with spare-parts manufacturers, component suppliers, Original Equipment Manufacturers (OEM vendors), automobile traders, investors, buyers and enthusiasts, who want to expand their business networks and gain more information about the innovations and products in this sector.” The inaugural day at the show, saw an overwhelming response from industry stakeholders, international large-scale buyers and diverse consumer segments, as the Pakistan Auto Show features; cars, tractors, trucks, buses, 4X4, motorcycles, three wheelers and exotic cars, while promoting a wide array of advanced technologies and solutions, including; engines, casting, forging, sheet metals, jigs and fixtures, along with electronics, car-paints, tools, tires, batteries, plastic parts, rubber parts and accessories.

------------

Automobile Sector Has Key Importance In Economy: Secretary

https://www.urdupoint.com/en/business/automobile-sector-has-key-imp...

LAHORE, (UrduPoint / Pakistan Point News - 31st Jul, 2022 ) :Provincial Industries and Commerce Department Secretary Dr Ahmed Javed Qazi said on Sunday that automobile industryenjoyed a key position in the national economy, and effective steps were being taken to increase its share in the GDP and get its proper share in the global market.

This sector, he added, was providing opportunities to value-added exports; therefore, the Punjab government was providing all possible support for development of this industry.

Addressing an industrial symposium, organised by the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) here at the Expo Center, he said 10 special economic zones were functional in the province, while recommendations had been sent to the Federal government for three new special economic zones. "There are vast opportunities for domestic and foreign investors in these special economic zones. There are also 24 small industrial estates for investors in the province," he added.

Qazi said that the University of Engineering and Technology (UET) Lahore was contributing much to promote automobile and engineering sector and the Punjab Tianjin University of Technology, Mir Chakar Khan University, Dera Ghazi Khan, and Rasool University Mandi Bahauddin were producing high-quality technologists; however, there was a need to strengthen the linkages between academia and industry.

The secretary said that such seminars prove helpful in policy-making process, assuring the recommendations that came out at the symposium would be considered by the relevant departments. He said that holding an auto show was a welcome step as 153 local and international exhibitors were participating in the event, factories making cars, tractors and motorcycles, apart from factories making auto-parts have set up their stalls.

[Riaz Haq]

Ritesh Kumar Singh
@RiteshEconomist
While domestic #demand is hampered by high taxes on both vehicles, fuels, motor insurance and repair and maintenance as well as traffic congestion that jack up the cost of owning #vehicles relatively stronger rupee is hurting #Exports, for instance, of 2W.

https://twitter.com/RiteshEconomist/status/1611901898642321409?s=20...

Two-wheeler sales stuttering, how long before it gets better?
After signs of recovery, two-wheeler sales slipped in December showing weakness in domestic demand as well as exports. Expectations are that improving rural demand will drive sales, albeit after a couple of quarters

https://www.moneycontrol.com/news/opinion/two-wheeler-sales-stutter...

ighlights December saw leading two-wheeler firms report a sales drop both year-on-year and month-on-month Domestic demand is yet to grow beyond 2019 pre-pandemic levels Rural sentiment is turning positive but yet to translate into two-wheeler purchases Exports were hit due to devaluation in currencies of importing markets After a couple months of improvement, a weak December for two-wheeler (2W) sales is a setback for forecasts of recovery in 2023. This auto segment registered a marginal year-on-year (yoy) sales rise, while declining compared to the previous...