The decline in Automobile will likely reduce the jobs in the market. According to market analysts, 10-15 percent of jobs will be lost in months to come.
Warning of tough times ahead, they said rising auto prices on the back of steep currency depreciation, the imposition of federal excise duty in the range of 2.5-7.5pc depending on the engine size and tough economic climate have affected overall sales.
Auto sales have declined by 7pc in the last financial year with experts fearing the market to shrink further by 15-20pc during the ongoing fiscal year.
The major slowdown was witnessed in the sale of cars above 1,300CC, forcing both Honda and Toyota manufacturers in the country to significantly scale down production during the month to clear inventories.
“The sales have picked up slightly but remain much lower than in any given month in the recent years,” a Honda Atlas Cars Pakistan (HACP) executive told Dawn on the condition of anonymity.
“The reduced sales mean lower profits for manufacturers and lower tax revenue for the government. The slowdown in the automotive industry is unlikely to reverse unless the government helps us reduce prices by slashing taxes,” he added.
HACP has kept its plant closed for 12 days during July as inventories piled up amid faltering sales.
Indus Motors Company (IMC), which produces Toyota vehicles in the country, also cut down production to five days a week whereas Pak Suzuki Motor Company (PSMC), which virtually controls the entire domestic market share of cars with engine size of up to 1,000CC, has announced that it does not plan on scaling down its production.