- MLT announces closure citing decline in demand for tractors.
- Analysts say agricultural land of Sindh is still under water due to floods.
- Cite high inflation behind reduction in demand for tractors.
KARACHI: Millat Tractors Limited (MTL), in a statement sent to the Pakistan Stock Exchange (PSX), announced the closure of its production on Fridays citing a decline in demand for tractors in the country, The News reported Friday.
“Due to reduced demand for tractors, the company will observe Fridays as non-production days from December 16, 2022, till further notice,” the company secretary of Millat Tractors said in a statement.
As per the analysts, the agricultural land of Sindh was still under water in many areas due to the cataclysmic floods in the country.
They added that there was also an increase in inflation in the country which has led to a reduction in demand for tractors.
In October, Millat Tractors recorded a decrease of 75% month-on-month and 72% year-on-year to reach a sales figure of 638 units due to the shutdown of plants for 23 days in September amid floods.
In a report published on December 13, sales of all other variants of cars, trucks, buses, tractors, jeeps, pick-ups, and three-wheelers as well as two-wheelers saw a decline in November 2022 compared with November 2021.
Decline in motorcycle production
Meanwhile, motorcycle manufacturing has also witnessed a decline in 2022 which may be due to the steep increase in the price of two-wheelers.
Since bikes are purchased and used by low-income buyers, the sales might have slowed a bit if the prices remained stable, however, at current rates and almost stagnant incomes, people are struggling to make ends meet.
Another reason for the drop, the report added, might be declining agricultural productivity, as most motorbike sales in the country are accounted for in rural areas. Recent floods that affected over 34 million people are a reason for slumping sales.
Motorcycle production data is from the Pakistan Automotive Manufacturers Association (PAMA), however, many motorbike manufacturers are not registered with it, and the Pakistan Bureau of Statistics (PBS) records their production data.
However, the statistics for last year are available that put the total motorbike production at 2.6 million.
The PAMA statistics for the first five months of the current fiscal year give a true picture of the state of the bike industry in the country.
In the July-November 2022 period, the bike industry (registered with PAMA) produced 521,643 bikes against 797,346 produced during the same period of last year.
This is a massive decline of 34% in the first five months of the current fiscal year.
