Car sales post 32pc growth in July – October 2017

KARACHI: The local assemblers have managed to sell 83,809 units of car, vans and jeeps during July – October 2017/2018 as compared with 63,633 units in the same period of the last fiscal year, showing 32 percent growth.
According to the latest figures released by Pakistan Automotive Manufacturers Association (PAMA), local car assemblers (including LCVs, Vans and Jeeps) managed to sell 23,341 units in October 2017, up 46 percent year on year (YoY) and 24 percent sequentially.
Analysts at Topline Securities said that these are highest monthly sales ever and is due to recent change in import procedure as ongoing disruption in imports of used cars has contributed to strong demand.
If this trend continues going forward then full year sales may be at 236,000 units (up 10 percent YoY), the analysts said.
They believe Pak Suzuki (PSMC), was major beneficiary as majority of used car imports fall under lower engine capacity segment. PSMC exhibited robust growth where sales rocketed 53 percent YoY as price conscious models Mehran (+41 percent YoY), WagonR (+141 percent), & Cultus (+23 percent) all exhibited strong sales. Cumulative, 4MFY18 sales were up 36 percent YoY for PSMC to 46,941 units.
Honda’s (HCAR) sales normalized to 4,506 units, rebounding 31 percent MoM (50 percent YoY) as last months production was affected due to extended holidays. 4MFY18 sales grew 55 percent to 17,110 units due to success of new models Civic/BRV & recently revamped City.
Toyota’s Indus Motors (INDU) lagged behind peers with increase of 4 percent/28 percent MoM/YoY as it continues to face capacity constraints, while the higher YoY increase is attributable to production issues last year. 4MFY18 units sales are up 10 percent YoY.
Tractor sales continue to exhibit upward trajectory with sales growing by 28 percent YoY in Oct’17. Millat Tractor (MTL) outperformed exhibiting 36 percent YoY growth. During 4MFY18 tractor sales reached 21,757units. Going forward, we expect lower GST on tractor purchase, fertilizer cash subsidy, along with Rs2bn subsidy for farmers on tractor purchase recently announced in FY18 Sindh provincial budget to improve farmers purchasing power & thus improve overall tractor sales going forward.
Truck & Bus sales of PAMA member companies in Oct’17 remained strong, growing by 24 percent YoY, while during 4MF18 sales rose 23 percent YoY. We foresee this trend to continue fueled by CPEC, higher road connectivity, low financing rate, change & enforcement of axle load limit per truck on highways by National Highway Authority.
Motorcycle/3-wheeler sales for Oct’17 have grown by 18 percent YoY, due to rising disposable income of lower middle class. Cumulative 4MFY18 sales are up 74 percent YoY.

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