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Car sales climb up by 23 percent in seven months

KARACHI: The sales of locally manufactured motor cars registered 23 percent increase during first seven months (July – January) of 2020/2021 owing to lower interest rates and reduction in coronavirus infection rate.

According to Pakistan Automobile Manufacturers Association (PAMA) the car sales increased to 97,469 units during first seven months of the current fiscal year as compared with 79,458 units in the corresponding months of the last fiscal year.

The total number of car sales also included 2,279 units sold by Hyundai, which started reporting of sales from the current fiscal year.

Indus Motors has registered 74 percent growth to 31,591 units during the period under review as compared with 18,197 units in the corresponding period of the last fiscal year.

The sale of Honda Cars also posted 56 percent growth to 16,116 units during July – January 2020/2021 as compared with 10,356 units in the same period of the last fiscal year.

However, the sales of Pak Suzuki witnessed a decline of 7 percent to 46,949 units during the period under review as compared with 50,253 units.

Analysts at Topline Securities said that car sales, as reported by PAMA, have increased by 46 percent YoY in January 2021 to 17,515 units.

The same, including Lucky Motor Corporation (KIA, non-member of PAMA), is up by 67 percent YoY.

Pak Suzuki (PSMC) led the charge of the New Year euphoria with a massive increase of 62 percent YoY. This was primarily driven by Alto (+113 percent YoY) and Wagon R (+132 percent YoY) sales.

Indus Motor (INDU) and Honda Car (HCAR) registered sales increases of 36 percent YoY and 11 percent YoY, respectively. INDU sales were led by Yaris, which again outsold total HCAR sales.

New entrants into Pak Auto space, Hyundai Nishat sold 515 units in Jan-2021, while Lucky Motor sold around 2,500 units, as per our channel checks.

Car sales have increased by 26 percent MoM in January 2021. The increase was driven by HCAR (+39 percent MoM) and INDU (+36 percent MoM) as the New Year effect kicked in.

Atlas Honda (ATLH) recorded motorbike sales of 114,001 units in Jan-2021, up 20 percent YoY. In 7MFY21, sales have increased by 20 percent YoY.

Tractor sales in Jan-2021 are up by 135 percent YoY and 57 percent MoM. Millat Tractors (MTL) recorded increase of 195 percent YoY (+30 percent MoM) while Al Ghazi Tractors (AGTL) sales increased by 53 percent YoY (+290 percent MoM), respectively.

The analysts said that demand for cars to grow stronger owing to low interest rates environment and pickup in economic activity.