Car sales reach at 93,570 units, up 66pc year-on-year


The car sales jumped over 55 percent in first five months of the current fiscal year to 93,570 units versus 56,339 units in the same period last year.

“The car sales have increased as the interest rates are 42-year lower from last three month,” said Mohammad Tahir Saeed, analyst at Topline brokerage house. In a recent development, both Indus Motors (INDU) and Honda cars (HCAR) have increased car prices by 1.0 percent and 1.5 percent owing to 1 percent hike in customs duty, the analyst said, adding that car assemblers passed on cost hike quite easily due to strong demand in the country.

Pakistan local car assemblers (including LCVs, Vans and Jeeps) posted 66 percent YoY increase in five month of 2015- 16.

The analyst now forecasts local car sales to grow at 13 percent in fiscal year 2015-16 to reach at 2,03,941 units. This lower growth is due to completion of taxi scheme in Feb 2016 and decline in civic volumes in anticipation of new model, which is expected to hit the market in July 2016.

Tractor segment, on the other hand, posted a decline of 38 percent YoY during five year 2015-16 to reach at 11,418 units. The analyst attributes this decline to the delay in the launch of provincial tractor subsidy schemes. To recall, Punjab/Sindh government in budget 2015-16 announced subsidy of 25,000/29,000 tractors.

Trucks and buses segment of Pakistan automobile sector has also posted an increase of 39 percent to 2,115 units during first five month of 2014-15. This surge in demand has happened due to China Pakistan Economic Corridor (CPEC) and improving law and order situation in the country.

Pak Suzuki Motors (PSMC):

Amongst individual companies, PSMC sales increased by 97 percent YoY to 58,098 units in July-Nov 2015-16 primarily due to Punjab government taxi scheme. Volumes decreased by 3 percent MoM due to deferred buying of customers owing to year end phenomenon. This declining trend will continue in the month of Dec 2015 because customers usually prefer to purchase and register their vehicles in the first month of new year.

Profitability of PSMC will grow by 196 percent in 2015 on the back of volumetric growth and weakening of Japani Yen against Pak rupee.

Indus Motors (INDU):

INDU sold 25,743 units in five month 2015-16 compared to 18,786 units in the same period last year.

In Nov 2015, INDU sales stood at 5,516 units, up 23 percent year on year. On MoM basis, sales remained flat. Earnings of INDU will grow by 135 percent and 6 percent in 2015-16 and 2016-17, respectively.

Honda Cars (HCAR):

HCAR sold 9,582 units in July-Nov 2015-16 compared to 7,888 units in the same period last year. In Nov 2015, HCAR sold 1,523 units, up 20 percent YoY (down 19 percent MoM).

Volumes of Honda Civic are expected to dry out in coming months in anticipation of new model launch in July 2016.

Millat Tractors (MTL) & Al Ghazi (AGTL):

Millat Tractors (MTL) and Al-Ghazi Tractors (AGTL) both witnessed a decline in their volumes during July-Nov 2015-16. The industry sources revealed that farmers are waiting for the execution of announced subsidy schemes by Punjab and Sindh government.

MTL sold 7,142 units in July-Nov 2015-16 compared to 11,247 units in the same period last year. On MoM, MTL sales increased by 7 percent to 1,421 units in Nov 2015. During July-Nov 2015-16, AGTL witnessed a decline of 44 percent YoY in its sales to 3,876 units. Company sold 744 units in Nov 2015, down 64 percent YoY (-26 percent MoM).