The Booming Automotive Industry in Pakistan

Carmudi's report on ‘The Booming Automotive Industry in Emerging Markets’ provides a detailed look into the global state of automotive sales and how car purchasing behaviors have changed due to the drastic increase in internet and mobile penetration, rising GDP, and the emergence of a middle class. The findings in this report are the results of Carmudi quantitative surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout Pakistan.

The State of Global Car Sales: Global automotive sales for 2015 are expected to reach close to 89 million, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.

Growth of Auto E-Commerce: Globally, auto E-Commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets. In Pakistan, where economic growth is at a seven-year high, close to 30% of car buyers report using the Internet to conduct research on a car before making a purchase.

Changes in Pakistan Car Sales: The Carmudi study found that over 58% of car dealers in Pakistan reported an increase in car sales over the past twelve months, while a close 41.7% reported a decrease. According to the Pakistan Automotive Manufacturer’s Association, local auto sales, including light commercial vehicles, grew by 72% compared to the same month last year. One reason for the boom is the reduction in interest rates over the course of the year. That said, car financing still stands at less than 35% of the total car sales in Pakistan.

The Shift to Online: Car Dealers are beginning to transition to the digital space to reach potential buyers. 25% of dealers reported using websites to reach potential buyers, and 16.7% are actively using Facebook. Car dealers have not started using Twitter or Instagram to reach potential consumers. Although the shift towards online is apparent, car dealers in Pakistan still have relatively high level of offline advertising, with 41.7% of car dealers are still comfortable and majorly focusing their listings on newspapers.

The Future of Car Sales in the Pakistan: After a 24% improvement during the first three quarters of Fiscal Year 2015, sales of new and used vehicles have taken off, and are expected to reach their highest rate in three years. Auto sales in 2015 are expected to hit 165,000 units, nearly reaching the amount sold in 2012. HM Shahzad, Chairman of All Pakistan Motor Dealers Association (APMDA) said “If provided a level playing field for all stakeholders, the Auto Industry can contribute substantially in achieving the GDP growth targets.The used car import alone can generate Rs.60 to 70 billion in revenue while providing healthy competition and choice of multiple makes and models at affordable prices to the consumer”

Speaking about the growth of Pakistan’s Automotive Industry, MD of Carmudi Pakistan, Raja Murad Khan said: “The growth in Pakistan’s Automotive Industry, the increase in purchase intent and the shift of buyers from traditional to online marketplace are all positive indicators for Carmudi’s growth and success in Pakistan. Carmudi is committed in becoming a one-stop shop for all car-related topics, be it car reviews, news, tips or simple advice and we are thrilled to share with you our insights on The Booming Automotive Industry in Pakistan”

Carmudi is one of the leading online vehicle platforms in Pakistan offering private customers, car dealers and other partners a car trading platform that helps them sell and find cars, motorcycles or commercial vehicles in an easy and effective manner. The portal contains a wide range of car models including but not limited to brands like Honda, Toyota, Suzuki, Daihatsu, Mitsubishi and more dealing with both brand new and used cars.