Pakistan June. The market rolls down after years of record

Pakistan Motorcycles

Pakistani Motorcycles Industry in the first half 2019 was hit by negative economic environment and reported a double-digit lost after years of rolling growth. Sales at 878.404 were down 11.3%. Honda dominates with share at 60% while the market stands as the sixth biggest market in the World.


Economic Environment

Pakistani economy remains on feeble footing. The rupee fell to record lows after the announcement of the IMF’s bailout package in May, which was accompanied by a push from the Fund for the Central Bank to adopt a more market-determined exchange rate. Moreover, merchandise exports contracted in March and April, while the latest data suggests the agricultural and industrial sectors continue to struggle. However, more positively, the current account deficit markedly improved in July 2018–April 2019.

Economic growth is projected to be lethargic in the fiscal year ending June 2020. A more austere fiscal stance and economic reforms to narrow gaping fiscal and current account deficits will likely hamper short-term growth prospects. Low international reserves, ballooning public debt and tensions with neighboring India present downside risks to the outlook.


Market Trend

In a such not positive economic environment and following years of rolling growth, the country’ main industry – the two-wheeler – has declining inexorably.

Indeed, according to data released by the Pakistan Association of Automotive Manufacturers, in the first three months of the 2019 the market has shown discontinuity with the previous trend, breaking the growth after years of records.  Total sales (including both motorcycles/scooters and three-wheeler/rickshaw) have been 425.672, down 12.4% from the correspondent quarter last year, which was the all time record. The already negative trend reported in the first two months, was further deteriorated in March when sales dropped 18.3%.

The trend unchanged in the second quarter, despite the fall moderated, with April sales at 155.215 (-12.3%), May at 154.782 (-8.5%) and June at 142.735 (-9.7%) ending the first half 2019 with 878.404 sales, down 11.3%.

The outlook for the rest of the year is negative while in the second half of 2020 the growing path is foreseen back.

In recent years, Pakistani motorcycles industry has been among the fastest in the World. Indeed, the milestone of 1 million units has been hit for the first time only in the 2015 and now the market is already running towards the 2 million annual sales. Following the over 1.4 million sales achieved in the 2017, the market further boomed in the 2018, with a record of 1.900.382 sales. up 6.6%, and scoring the new All Time Record.

Thanks to this further outstanding year, Pakistani market gained one place in the Global ranking advancing in sixth place ahead of Thailand.


Best selling Brands

As far as regard the competitive landscape, all competitors are producing locally and just a reduced number of manufacturer are fighting in the market, with local brands (DYL, Sohab, United Auto, Sazgar, Road Prince, Hero Motor (a Pakistan company) Ravi) Japanese (Honda, Suzuki and Yamaha) and Chinese (Qingqi).

The most of the demand is concentrated on motorbikes in the 125-150 cc range quite flexible for the local unpaved roads and affordable for people with a still limited purchase power. Premium brands are not yet landed here as the scooter manufacturers, because their segment are negligible. Even Japanese are locally producing low displacement-low cost models and not importing their top class models.

Market leader is Honda with over 60% of market share and 2018 sales at 1.15 million units (+10.8%) with the CB 150F as best model. 

In second place there is the local brand United Auto with 431.517 sales (+16.0%) and in third Road Prince with sales at 207.485 (-11.2%).


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