Car sales increase by 8 percent in first quarter

Car sales increase by 8 percent in first quarter

KARACHI: The sales of locally manufactured cars have registered an 8 percent increase in the first quarter (July – September) 2020/2021 in Year on Year (YoY) basis due to restoration of economic activities after lifting of coronavirus lockdown.

According to statistics released by Pakistan Automobile Manufacturers Association (PAMA) on Monday the car sales went up to 37,017 units during the first quarter of the current fiscal year as compared with 34,308 units in the corresponding quarters of the last fiscal year.

According to analysis by Topline Securities, the car sales have posted an increase of 18 percent YoY in September 2020 to 13,882 units. Indus Motor (INDU) and Honda Car (HCAR) registered sales increase of 106 percent YoY and 87 percent YoY, respectively.

However, Pak Suzuki Motor Company (PSMC) sales declined by 20 percent YoY due to drop in Alto’s sales by 37 percent YoY (last year Alto saw high numbers due to its recent launch).

Car sales also increased by 19 percent MoM in September 2020. The increase was driven by INDU’s increase of 32 percent MoM as Yaris sales picked up 42 percent MoM. HCAR sales also improved by 20 percent MoM as BRV sales increased by 50 percent MoM.

New entrants into Pak Auto space continue to perform well with Hyundai Nishat selling 316 units (+187 percent MoM) in September 2020, while Kia Lucky Motors (KLM, non-member of PAMA) sold around 1,500 units

KLM is also planning to shift to double-shift production from January 2021 to meet high customer demand.

Hyundai Nishat had launched Tucson in the SUV category last month. A strong market response is visible as the number of units have jumped to 215 in September 2020 from 22 last month.

Atlas Honda (ATLH) recorded motorbike sales of 109,002 units in September 2020, up 45 percent YoY. In 1QFY21, sales have increased by 22 percent YoY.

Tractor sales in September 2020 are up 12 percent YoY, while also increased by 49 percent MoM. Millat Tractors (MTL) recorded an increase of 69 percent YoY while Al Ghazi Tractors (AGTL) sales declined by 31 percent YoY, respectively.

The analysts expect demand for cars to grow stronger owing to lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19.

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