Local car assemblers (including LCVs, vans and jeeps) posted 24 per cent year-on-year (YoY) growth, touching the figure of 201,151 units first time in Pakistan’s history during the past eleven months.
Continued growth in the vehicle manufacturing industry can be attributed to auto financing due to decade low interest rates, Punjab government’s taxi scheme, improved security situation and improvement in the country’s economic situation overall.
During the fiscal year 2014-15, local vehicle sales stood around 162,151 units.
Pak Suzuki:
Amongst individual companies, Pak Suzuki’s (PSMC) sales increased 33 per cent YoY to 118,629 units in July-May 2015-16 mainly due to Punjab government’s taxi scheme.
However, the volumes remained flat on month-on-month, while they declined 22 per cent YoY in May 2016 to 9,001 units due to the completion of the taxi scheme.
Indus Motor:
Indus Motors (INDU) sold 58,531 units in the past 11 months compared to 51,485 units in the same period last year. Sales marginally improved in May 2016, up one per cent YoY, coming in at 5,544 units.
Honda sold 23,800 units in 11 months compared to 21,134 units in the same period last year. Sales improved seven per cent YoY to 2,507 in May 2016, but declined nine per cent MoM.
Analysts said that Honda City is the main contributor to HCAR’s sales growth and volumes of Honda Civic are expected to dry out now. Buyers are likely to prefer the new model of Civic (10th generation). Pre-booking for the same has already begun and the company is expected to launch the model in the next few months or so, the industry sources said.
Millat Tractors Limited (MTL) & Al Ghazi Tractors (AGTL) Limited:
Pakistan tractor segment posted a decline of 28 per cent YoY during July-May 2015-16 to reach 30,607 units. This decline came due to the delay in launch of the provincial tractor subsidy scheme of 25,000/29,000 tractors, which was announced by Punjab/Sindh governments in their budgets for 2015-16.
Both Millat tractors (MTL) and Al-Ghazi tractors (AGTL) witnessed a decline in their sales volumes during July-May period as farmers held off purchases in anticipation of the said subsidy.
MTL sold 18,208 units during the said period, compared to 26,155 units in the same period last year. Sales of the company fell 18 per cent YoY (4 per cent MoM) to 2,234 units in May 2016.
In the same period, AGTL witnessed a decline of 26 per cent YoY in sales to 11,653 units. The company sold 1,771 units in May 2016, up 14 per cent YoY (down eight per cent on MoM).
Farmers have resumed regular purchases due to uncertainty in the subsidy scheme, the industry source said.
This year’s budget is full of incentives for the agriculture sector, including reduction in urea prices and financing rates. This should help improve liquidity with farmers resulting in better off-take of tractors going forward, sources said.
Trucks and buses segment of the Pakistan automobile sector posted an increase of 42 per cent YoY to reach 5,815 units in 11 months. This surge in demand is only because of China-Pakistan Economic Corridor (CPEC) and better law and order situation in the country.
