The local vehicle sales increased to 74,541 units or up 67 per cent during first four months of the current fiscal year (2015-16) compared to 44,550 units during the same period last year, but the analysts think it’s largely because of Punjab government’s taxi scheme.
Tractor segment, on the other hand, posted a decline of 33 per cent year-on-year (YoY) during July-Oct 2015-16 to reach 9,148 units. This decline may be because of the delay in the launch of provincial tractor subsidy schemes in Punjab and Sindh governments.
In the federal budget 2015-16, government had announced a subsidy of 25,000 – 29,000 per tractor, but the federal government has not fulfilled its promise in the last four months. Tractor manufacturers approached the government officials to shelve the tractor scheme in case government is running short of funds. Because of uncertainty over the subsidy, farmers are waiting to purchases the tractors.
In 2015, auto volumes surged by 31 per cent on the back of new model of Toyota Corolla, Taxi Scheme of Punjab government and an increase in car financing owing to 42-year low interest rates in the country. The analysts forecast that the local car sales will grow at 13 per cent in 2016 to reach 203,941 units. This lower growth is due to the completion of taxi scheme in February 2016 and decline in Civic volumes in anticipation of new model which is expected to hit the market in July 2016.
PAK SUZUKI MOTORS (PSMC):
Amongst individual companies, Pak Suzuki Motor Company sales increased by 96 per cent YoY to 46,108 units in July-Oct 2015-16 primarily due to Punjab government’s taxi scheme. The provincial government is giving loans as part of the self-employment scheme in Punjab.
Because of the scheme, car volumes increased by 8 per cent month-on-month due to relatively low base owing to extended Eid holidays in September 2015. The profitability of PSMC is likely to grow by 196 per cent at the end of 2015 on the back of volumetric growth, despite weakening of Japanese Yan against the local currency.
INDUS MOTORS (INDU)
Indus Motors sold 20,227 units in July-Oct 2015-16 compared to 14,287 units in the same period last year. Market sources, however, claim that the new model of Toyota Corolla is still in demand while the company is also considering to launch Toyota Vitz in Pakistan.
In Oct 2015, Indus Motor sales stood at 5,460 units, up 23 per cent year on year. On MoM basis, sales were up 10 per cent. Toyota’s new Corolla model will be sold out in the next 3-4 months, the market sources said.
The earnings of the Indus Motors are expected to grow by 135 per cent and 6 per cent by the end of 2015-16 and 2016-17, respectively.
HONDA CARS (HCAR):
HCAR sold 8,059 units in July-Oct 2015-16 compared to 6,622 units during the same period last year. In Oct 2015, HCAR sold 1,875 units, up 8 per cent YoY (down 6 per cent MoM).
Sales of Honda Civic are expected to dry out in coming months in anticipation of new model launch in July 2016.
MILLAT TRACTORS (MTL) AND AL GHAZI (AGTL):
Millat tractors (MTL) and Al-Ghazi tractors (AGTL) both witnessed a decline in their volumes during July-Oct 2015-16. Industry sources revealed that farmers are waiting for the implementation of the announced subsidy schemes by Punjab and Sindh governments.
MTL sold 5,721 units in the last four months compared to 8,496 units during the same period last year. On MoM, MTL sales decreased by 45 per cent to 1,329 units in Oct 2015.
AGTL sold 1,001 units in Oct 2015 compared to 1,710 units in the same month last year. On MoM, AGTL sales increased by 41 per cent in Oct 2015.
