Car sales climb up by 16pc in August

Car sales climb up by 16pc in August

KARACHI: The sales of locally manufactured cars have recorded 16 percent increase to 11,678 units in August 2020 as compared with 10,102 units in the same month of the last year.

According to data released by Pakistan Auto Manufacturers Association (PAMA) Indus Motor (INDU) and Honda Car (HCAR) registered sales increase of 52 percent YoY and 72 percent YoY, respectively. However, Pak Suzuki Motor Company (PSMC) sales declined by 9 percent YoY.

Analysts at Topline Securities said that Kia Lucky Motors (non-member of PAMA) continued to perform well and is also planning to shift its production to double shift from Jan-2021 to meet high customer demand. As per our channel checks KIA sold around 1500 units for August 2020.

Another new entrant Hyundai Nishat launched Tucson in SUV category during the outgoing month and successfully sold 22 units along with 88 units of Porter H-100 (a commercial pickup).

Moreover, car sales increased by 1 percent MoM in Aug-2020, in which major increase was reported by PSMC with 20 percent MoM rise, however INDU and HCAR reported declines of 18 percent MoM and 8 percent MoM, respectively.

Atlas Honda (ATLH) recorded motorbike sales of 85,000 units in Aug-2020, up 6 percent YoY. However, sales declined by 10 percent MoM.

Tractor sales in Aug-2020 are up 12 percent YoY, while down by 21 percent MoM. Millat Tractors (MTL) recorded increase of 80 percent YoY while Al Ghazi Tractors (AGTL) sales declined by 51 percent YoY, respectively.

We expect demand for cars to grow stronger as lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19 has revived demand for new cars.

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