Car sales decline 3.2 percent in July – January

KARACHI: The sale of locally assembled motor vehicles has declined by 3.2 percent during first seven months of current fiscal year despite higher prices owing to depreciation of rupee value.



According to data released on Monday, the total car sales were at 142,980 units during July – January 2018/2019 as compared with 147,700 units in the corresponding period of the last fiscal year.

Pak Suzuki, the leading car assembler, witnessed 10 percent decline in its sale for the period. The sales of the company fell to 74,903 units during July – January 2018/2019 as compared with 83,017 units in the same period of the last fiscal year.

However, sales of Indus Motors witnessed increase of nine percent to 38,880 units during first seven months of current fiscal year as compared with 35,515 units.

The sales of Indus Motors eased by one percent to 28,796 units during the period under review as compared with 29,168 units.

According to commentary released by Topline Securities, Pakistan auto sales are down by 4 percent YoY in Jan 2019, as against 1 percent YoY increase in December 2018.

However, sales are up 16 percent MoM primarily due to seasonal factors.

Furthermore, anticipated price hike due to 5 percent devaluation in Pak Rupee during November and December 2018 may have also incentivized purchase of cars, the analysts at Topline Securities believe.

This brings 7MFY19 sales number to 143K units,
down by 3 percent YoY.

Despite supportive measures by the government in recent economic reform package (January 2019), we continue to expect slow down in auto sales given deteriorating economy as well as multiple price hikes in the past 14 months.

Indus Motors (INDU) continued to report YoY growth (up 16 percent YoY in Jan 2019) due to a strong order book led by sales of Corolla variants, up by 26 percent YoY.

However, sales in Fortuner and Hilux variants have declined by 45 percent YoY and 5 percent YoY, respectively. On a monthly basis, total volumetric sales are up 17 percent while sales are up 9 percent YoY for 7MFY19.

Honda cars (HCAR) grew its sales by 3 percent YoY due increase in civic and city sales volumes by 4 percent YoY.

BR-V continued its declining sales trend with a fall of 2 percent YoY. On a monthly basis, total volumetric sales are up 91 percent due to low base effect (December 2019 sales at 2,367 units, lowest monthly sales since January 2016) along with expected price hike, while sales are down 1 percent YoY for 7MFY19.

Pak Suzuki (PSMC) continued to report YoY decline in sales, down by 15 percent YoY in January 2019 after some respite in December 2018.

To note, PSMC sales volumes have fallen YoY in every month since August 2018 except for December 2018. Sales decline was led by Mehran, Bolan, Swift and Ravi variants down by 37 percent YoY, 27 percent YoY, 28 percent YoY and 11 percent YoY, respectively.

However, Cultus and Wagon-R sales rose by 7 percent YoY and 15 percent YoY, respectively. On a monthly basis, volumetric sales are flat while sales are down by 10 percent YoY for 7MFY19.

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