KARACHI - Auto industry sales continued with its downtrend and witnessed a massive decline of 50 per cent on Year on Year basis, as the cumulative auto sales (Cars + LCVs) stood at 17.1 units in 2MFY09, auto numbers as released by the Pakistan Automobiles Manufacturers Association (PAMA) said. Analysts attributed the steep decline in the auto sales to imposition of 5 per cent FED on sale of vehicles, increase in sales tax by 1 per cent and inflationary pressures in the economy. Contrary to the 50 per cent decline YoY in 2MFY09, the industry auto sales statistics on monthly basis reflected an increase of 31 percent to 9.7k units. Industry car sales increased 35 per cent YoY were spurred by higher PSMC sales improved by 53 per cent MoM, which were low in July-08 due to its plant shutdown for maintenance. Higher Hilux recorded 52 per cent increase MoM and Ravi soared by 43 per cent MoM sales contributed towards the 18 per cent MoM rise in industry LCV and Pickup segment sales. However, the increase in August 2008 over July 2008 was due to resume in production of Corolla by Indus after the launch of the new model. Moreover, Pak Suzuki also resumed full production after scheduled plant shutdown in July 2008, analysts added.    Industry car sales depicted a steep fall of 57 per cent YoY to 13.3k units in 2MFY09, with the greatest decline recorded in Santro of Dewan Motors (DFML) and Corolla of Indus Motors models of 94 per cent and 91 per cent YoY respectively to 42 units and 639 units in 2MFY09. The new Corolla model was launched in August-08 in the 1,800-2000cc categories. Total Corolla sales in August-08 were at 341 units, which is a 14 per cent increase MoM, mainly due to low-base effect as July-08 sales were a 7-year low for Corolla. Initial sales figures point towards a lukewarm response to the new Corolla. Industry LCV and Pickup sales bucked the dominant trend and grew by 28 per cent YoY to 3.8k units in 2MFY09, propelled by higher Ravi (PSMC) sales of 2.9k units, soared by 74 per cent YoY). At the company level, all the listed auto assemblers recorded a decline in sales with Dewan Motors (DFML) recording the steepest fall of 79 per cent YoY. Pak Suzuki (PSMC) and Honda Atlas Cars (HCAR) (car segment) managed to increase their respective market shares by 10.91pps and 5.55pps YoY respectively to 67.9 per cent and 15.8 per cent during 2MFY08. DFML and Indus Motors posted a decline in their respective market share of 2.98pps and 12.28pps YoY, settling at 2.2 per cent and 15.6 per cent in 2MFY09. Analyst held the view that factors contributing towards the auto demand erosion are  rising inflation in creased by 25.3 per cent YoY),  higher car prices,  increase in fuel prices  average gasoline prices up 61 per cent YoY), and high interest rates (average August-08 6M KIBOR up 344bps YoY to 13.6 per cent) that is inhibiting auto financing.