The sale of cars, including light commercial vehicles (LCVs), vans and jeeps, during 10MFY12 rose by 14 per cent to 143,374 units as against 125,766 units sold in the corresponding period last year. The growth arise from deferred sales from June to July due to reduced tax structure announced in Federal Budget FY12, Punjab government yellow cab scheme, 20 per cent increase in workers’ remittance in 10MFY12 and escalating fiscal deficit creating monetization phenomena, said Zeeshan Afzal of Topline Research. In April, car sales stood at 14,798 units, depicting an increase of 6 per cent from 13,914 sold in April last year but are down 11 per cent from 16,678 units sold in last month.
The MoM decline is on account of reduced Pak Suzuki Motor Company (PSMC) sales that declined by 21 per cent to 8,837 units as against 11,198 units last month. “We believe the decline is on account of reduced demand by the customers after the non availability of CNG fitted cars,” said Afzal. Furthermore, he said that the decline in sales was expected and would bear on the overall sales number at least in the short term. As compared to same month last year, the company has been able to sell an additional 18 per cent units. During 10MFY12, PSMC continue to post strong growth of 30 per cent to 90,197 units versus 69,203 units seen in same period last year primarily due to yellow cab scheme.
Indus Motors sold 5,203 units in April that is 16 per cent up from last month sales of 4,492 units while are an improvement of 11 per cent from 4,278 units in same period last year. During 10MFY12, the company sold 44,061 units compared to 41,940 units in same period last year, up by five per cent. Coure sales due to discontinuation effect are down 30 per cent and 7 per cent increase has been in company’s flagship product Corolla. With overall strong growth seen in volumetric sales and improved margins on account of rupee’s gaining 1.2 per cent against the Japanese Yen, is expected to bode well for sector’s profitability but we flag that the sector operates in high regulatory risk environment, said the analyst.
12% rise in the sale of automobiles when the petrol prices are rising by day is an indication of a dangerous widening gap between powerful and powerless. It also indicates the rampant corruption among a limited section of society. With over 40% population under poverty and over 50% illiteracy this indicator should be an eye opener.
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