Led by taxi scheme introduced by Prime Minister Nawaz Sharif in Punjab and overall improvement in economic situation in the country, Pakistan’s local car assemblers (including LCVs, Vans and Jeeps) posted a 72 per cent increase in first quarter of 2015-16.
During the three months (July-September) local vehicle sales stood at 54,812 units versus 31,899 units in the first quarter of 2015-16.
In September 2015, despite less working days due to Eid holidays, local car sales rose by 45 per cent year on year to 18,424 units while the sales declined by 10 per cent month on month basis.
Imported cars are roughly15 per cent of locally assembled cars.
Tractor segment, on the other hand, posted a decline of 28 per cent year on year during first quarter of 2015-16 to reach 6,745 units. The decline can be attributed to delay in the launch of provincial tractor subsidy schemes.
Punjab/Sindh governments in budget for fiscal year 2015-16 announced subsidy of Rs 25,000/29,000 on a tractor. In the month of September 2015, however, some encouragement was seen as tractor sales stood at 3,096 units – up 54 per cent month on month.
Overall healthy growth in auto sector is indicative of increase in per capita income, improved farmer economics and overall recovery of the economy.
Car financing is also picking up gradually (currently estimated at 30 per cent versus 5 per cent few years back).
Car sales (excluding imported) in Pakistan grew at a 5-year (FY11-15) CAGR of 5.3 per cent to 179,953 units while volumes surged by 31 per cent in 2014-15 on the back of new model of Toyota Corolla, Taxi Scheme of Punjab Government and an increase in car financing due to 42-year low interest rates in the country.
The analyst forecasts local car sales “to grow at 13 per cent in fiscal year 2015-16 to reach 203,653 units”.
Pak Suzuki Motors (PSMC): Taxi Scheme provided support
Amongst individual companies, PSMC sales increased by 98 per cent year on year to 33,770 units in the first quarter of 2015-16 primarily due to Punjab Government Taxi Scheme.
Volumes declined by 12 per cent month-on-month basis due to extended Eid holidays in September 2015.
The profitability of PSMC grew 139 per cent in 2015 on the back of volumetric growth and weakening of JPY against rupee.
Indus Motors (INDU):
New Model of Toyota Corolla is still in demand throughout the country. INDU sold 14,767 units in the first quarter of 2015-16 compared to 9,862 units in the same quarter last year. Customers had been waiting for the new model of Toyota Corolla in the same period last year which was the main reason for abnormally low base.
In the month of September 2015, INDU sales stood at 4,984 units which rose by 6 per cent YoY. On MoM basis, however, following the trend in PSMC due to holidays, INDU sales decreased by 10 per cent during the month. Just to highlight, Toyota’s new Corolla model is sold out for the next 3-4 months according to officials in the industry.
Honda Cars (HCAR):
Honda sales have also gone up despite new model from the competitor. HCAR sold 6,184 units in the first quarter of 2015-16 compared to 4,887 units in the same period last year. In September 2015, HCAR sold 2,001 units increasing by 14 per cent YoY while it remained flat on month-on-month basis.
According to analysts, overall market size of Pakistan’s automobile sector is growing.
Millat tractors (MTL) and Al-Ghazi tractors (AGTL) both witnessed a decline in their volumes during the first quarter. Sources revealed that farmers are waiting for the implementation of the announced subsidy schemes by Punjab and Sindh governments.
MTL sold 4,392 units in July-September compared to 6,086 units in the same period last year. On month-on-month basis, MTL sales increased by 75 per cent to 2,320 units in September 2015 from 1,329 units in August 2015.
AGTL sold 710 units in September 2015 compared to 1,104 units in the same month last year. On Month-on-Month basis, AGTL sales increased by 18 per cent in September 2015 from 601 units in August 2015.
