Local Mobile Phone Manufacturing Drops 20pc YoY in July 2024

According to the latest data from the Pakistan Telecommunication Authority (PTA), there has been a notable decline in local mobile phone manufacturing in Pakistan in July 2024. The manufacturing and assembly of mobile phones fell to 1.61 million units, representing a 20% decrease year-on-year (YoY) and a significant 62% drop compared to the previous month.

The sharp decline in July is mainly attributed to a surge in pre-buying activities in June 2024. This surge occurred following the announcement of an 18% General Sales Tax (GST) on mobile phones in the FY2025 budget. Anticipating the higher tax, consumers rushed to purchase mobile phones before the tax came into effect, leading to a temporary boost in sales. As a result, manufacturers ramped up production in June to meet the increased demand. However, this led to reduced production and sales in July as the market adjusted to the new tax regime.

Local Mobile Phone Manufacturing Drops 20pc YoY in July 2024

Despite the drop in July, the combined average monthly sales for June and July 2024 were 2.9 million units, higher than the average of 2.6 million units observed over the preceding five months (January to May 2024). This indicates that while there was a dip in July, the overall market demand for mobile phones remained strong, suggesting resilience in consumer purchasing behaviour.

During the first seven months of 2024, the total number of locally manufactured and assembled mobile phones reached 18.95 million units. This represents a substantial increase, more than doubling the production compared to the same period last year. The impressive growth is largely due to import restrictions imposed in the previous year, which encouraged local manufacturing. By reducing reliance on imports, the local industry has been able to grow and meet a larger share of domestic demand.

Compared to the same period in 2022, there is a 27% year-on-year increase in local mobile phone manufacturing. Several factors attributed to this growth, including the gradual economic recovery, a higher share of local production due to increased taxes on imported phones, and the continued expansion of Pakistan’s population. As more consumers enter the market, the demand for mobile phones will remain robust, providing further opportunities for local manufacturers to expand their operations and contribute to the country’s economic growth.

See Also: Pakistan’s Mobile Phone Manufacturing Surges 168% in First Five Months of 2024