The country’s auto assembling sector continues on its recovery phase as growth of 6 percent YoY has been witnessed in net sales during Jan-Mar 12 taking the toll to Rs 56 billion.
According to InvestCap Research, the growth in the topline earnings was well supported by 7 percent YoY growth in sales volume accompanied by 10 percent YoY increase in car prices by the assemblers. The gross profits of the company increased by 1.71pps YoY to 4.8 percent as assemblers passed on major incremental costs on consumers under self imposed policy. During the period, change in sale mix was also witnessed with the introduction of new model of Toyota Hilux by Indus Motors and rising sales of Suzuki Swift by Pak Suzuki Motors. Other income of the sector increased by massive 29 percent to Rs 727 million during Jan-Mar 12. Improved sales orders from consumers during the period have resulted in better cash position and return on deposits from banks of auto assembler.
As far as the bottom line is concerned, the sector posted the hefty growth of 143 percent YoY in PAT during Jan-Mar 12. Higher other income coupled with fall in effective tax rates to 40 percent, from 53 percent earlier, resulted in improvement in net margins by 1.18ppsYoY to 2.10 percent. Indus Motor’s Corolla remained the market leader holding the market share of 31 percent in total car sales during Jan-Mar 12 with volumetric sales growth of 6 percentYoY to 12.8k units.
Whereas, Pak Suzuki’s Mehran stood 2nd with the market share of 21 percent posting the volumetric sales growth of 14 percentYoY to 8.7k units during same period. Also during the period, Indus Motor announced to discontinue its Coure production while Pak Suzuki is going to stop the production of its Alto due to incompliant of EURO standard.
