Karachi: Barring a big importer cum assembler of domestic appliances, local makers and their dealers are worried over slowdown in sales from July onwards blaming high prices and taxation measures.

Sales of deep freezers and refrigerators also failed to pick up this year in Eidal Azha (August 12-14) following decline in slaughtering of sacrificial animals, they said.

Besides, demand of air conditioners did not show any steep jump despite hot weather from April to August.

Commenting on air conditioner sale, an executive in a Lahore based company, who did not wish to be named, said the AC sales witnessed 20-30 per cent drop in July-August as compared to same period last year due to high prices and some taxation measures taken by the government in Budget FY20 like CNIC condition on sale of above Rs 50,,000 for dealers.

He said AC price has risen by at least Rs 8,000-9,000 in the last one year due to rupee depreciation against the dollar.

On declining production and job cuts, he said his company had not sent home any workers and staffers so far. “Like many companies, our company has also revised sales target this year anticipating depressed market scenario besides cutting production as per demand.”

However, many companies still had unsold stocks of last year which means that they would keep the production low, he added.

“Our company has reduced its margins and also has not fully passed on the exchange rate impact to the consumers in order to keep price affordability to some extent.”

He said his company forecasts the slump to persist throughout the present fiscal year as well. Air conditioner sales dipped 1.37pc to 512,841 units in FY19.

Giving a contrasting view, Business Head B2B Solutions, LG Pakistan, Syed Farrukh Raza Alam said sales in July-August of AC, washing machines, TVs, double door fridge, etc were better than last year same period despite 15-20 per cent increase in prices in the last one year. His sales of invertor ACs were also brisk.

He said the company is currently assembling LED TV in Pakistan and plans to roll out locally made air conditioners and washing machines next year.

However, he said import of completely built up (CBU) units of various items has come down as the company is not importing appliances because of available stocks of previous imports in the markets and issues connected with duties and taxes.

According to official figures, overall local production of TV sets in FY19 rose by 3.3pc to 380,559 units.

President Karachi Electronic Dealers Association (KEDA), Mohammad Rizwan Irfan said deep freezers and fridge sales recorded steep fall of 50pc in the last two months as prices rose by 15-20pc in the last one year while low slaughtering of sacrificial animals also kept buyers away from the market. He said sale of cooling gadgets were also subdued despite marriage season that runs betweenr Eid and 1st Muharram.

He said CNIC condition and Sales Tax registration process had already caused anxiety among the dealers and manufacturers. Rizwan said many companies had suspended providing domestic appliances after various taxation measures, while many dealers are also not income tax filers.

According to figures of Pakistan Bureau of Statistics (PBS), production of refrigerators plunged by 24pc to 1.093 million units in FY19 while deep freezer sales soared by 39pc to 186,545 units in FY19.

A sales representative in Karachi of a Lahore based domestic appliances making company said the overall sales of domestic appliances shrank by 20-25pc in the last two months due to high prices.

Despite repeated attempts, officials of Dawlance Pakistan did not respond to Dawn queries.

Published in Dawn, September 8th, 2019