KARACHI – The car sales in Pakistan witnessed a significant decline during the first seven months (July–January) of the fiscal year 2019–2020, as total sales of locally assembled vehicles fell by 45 percent.
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Car sales slump by 44% in first half
KARACHI: Car sales have slumped by 44 percent to 67,019 units in first half (July – December) of fiscal year 2019/2020 as compared with 120,066 units in the corresponding half of the last fiscal year.
Major drop witnessed in the sales of Honda Cars which fell 66 percent to 8,146 units during first six months of current fiscal year as compared with 24,278 units in the same period of the last fiscal year.
It was followed by sales of Indus Motors which fell by 57 percent to 14,175 units in first half of current fiscal year as compared with 32,631 units in the corresponding period of the last fiscal year.
The sales of Pak Suzuki Motors witnessed decline of 27 percent to 44,698 units during the period under review as compared with 63,157 units in the corresponding period of the last fiscal year.
Analysts at Topline Securities said that overall Pakistan car sales jumped by 23 percent MoM to 12,069 units in December 2019, however the rise was largely led by 49 percent MoM increase in sales of Pak Suzuki Motor Company (PSMC).
The other two major manufacturers, Indus Motor (INDU) and Honda Car (HCAR) sales dropped by 12 percent MoM and 23 percent MoM, respectively.
The increase in sales of PSMC was largely driven by the announcement of increase in car prices by the manufacturer in mid of December 2019, which was effective from January 1, 2020.
The decline reported by the other manufacturers was largely in line with the historical year-end phenomenon, where consumers generally delay their purchases until the new year.
On a YoY basis, weak demand dynamics was again evident from a 38 percent YoY fall in sales in December 2019, taking 1HFY20 decline to 44 percent YoY.
This is primarily attributable to 1) higher car prices mainly due to PKR devaluation and 2) higher interest rates.
PSMC sales were down 26 percent YoY in December 2019, while INDU’s sales declined by 56 percent YoY with Corolla sales falling by 50 percent YoY.
HCAR sales fell by 58 percent YoY during Dec-2019 with combined sales of City & Civic declining by 56 percent YoY.
Sale of motorcycles by Atlas Honda (ATLH) witnessed an increase of 6 percent YoY as sales clocked in at 85k units, however it recorded a decline of 11 percent MoM.
Tractor sales recorded a growth of 75 percent YoY with Millat Tractor (MTL) sales rising by 175 percent YoY. On the MoM basis, overall tractor sales were down 37 percent MoM.
Analysts expect recovery in car sales volumes from start of 2020 as we believe volumes would have bottomed out in December 2019.
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Car sales witness 45 percent decline in July – November
KARACHI: Car sales witnessed 45 percent decline during first five months (July-November) 2019/2020 owing to increased prices and high cost of auto financing.
According to sales data released by Pakistan Auto Manufacturers Association (PAMA), the industry witnessed sale of 54,950 units during first five months of current fiscal year as compared with 100,643 units in corresponding months of the last fiscal year.
Analysts at Topline Securities attributed the fall to higher auto prices post rupee devaluation and higher interest rates for auto financing.
Honda Cars (HCAR) sales fell 67 percent to 7,141 units during July – November 2019/2020 as compared with 21,911 units in the same period of the last fiscal year.
Honda Cars sales 62 percent YoY during November 2019, where combined sales of City and Civic fell by 66 percent YoY, however it recorded increase of 4 percent on Month on Month (MoM). BR-V reported a decline of 24 percent YoY and 34 percent MoM.
The car sales of Indus Motors (INDU) fell by 57 percent to 11,843 units during first five months of current fiscal year as compared with 27,307 units in the same months of the last fiscal year.
Indus Motors (INDU) reported second consecutive MoM increase in volumetric sales; up by 6 percent MoM mainly due to 10 percent MoM and 8 percent MoM increase in its Corolla and Fortuner variants, respectively.
This increase in volumes is on the back of aggressive promotions, discounts & different waiver schemes offered by company in collaboration with commercial banks. However, INDU continues to report a decline on YoY basis; down by 52 percent YoY in November 2019.
The sales of Pak Suzuki Motors Company (PSMC) posted decline of 30 percent to 35,966 units during first five months of current fiscal year as compared with 51,425 units in the corresponding period of the last fiscal year.
Pak Suzuki recorded a 31 percent YoY decline in November 2019. The decline in sales was led by Wagon-R and Cultus, which is down 70 percent YoY and 41 percent YoY respectively.
Furthermore Alto has also depicted monthly decline of 27 percent YoY which is highest since its launch.
Bolan and Ravi variants are down 58 percent and 56 percent YoY, respectively. Swift sales were down by 42 percent YoY.
The analysts expect recovery in car volumes from start of 2020 as auto volumes will likely bottom out in December 2019.
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Car sales plunge by 42pc in July 2019
KARACHI: Car sales have witnessed a sharp decline of 42 percent in July 2019 owing to massive depreciation in local currency and tax measures taken in the budget 2019/2020, analysts said on Monday.
According to statistics released by Pakistan Automobile Manufacturers Association (PAMA), the car sales were 12,482 units in July 2019 as compared with 21,344 units in the same month of the last year.
Industry analysts said that the local currency witnessed sharp decline during current calendar year, which hampered the growth in car sales.
The significant decline was witnessed in cars with engine capacity of 1300CC and above. The sales of this segment fell by 62.6 percent to 3,607 units in July 2019 when compared with 9,659 units in the same month of the last year. The production of this category was also declined to 5,582 units as compared with 9,833 units.
The sales of small cars with engine capacity of 1,000 CC also fell by 53.73 percent during the period under review. The sales of cars under this category fell to 2,051 units in July 2019 as compared with 4,433 units in the same month of the last year.
The sales of cars below 1,000 CC, however, increased to 5,310 units from 4,783 units.
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Car sales down 4 percent on economic slowdown, high prices
KARACHI: The sales of locally assembled cars have declined by 4 percent during first nine months (July-March) 2018/2019 owing to slowdown in economy and recent rise in car prices, analysts said on Wednesday.
The sales of locally assembled cars fell to 185,023 units during July – March 2018/2019 as compared with 192,734 units in the corresponding period of the last fiscal year, according to Pakistan Auto Manufacturers Association (PAMA).
Analysts at Topline Securities attributed the decline in car sales to slowdown in economy and rise in recent car prices.
Indus Motors (INDU) reported 11 percent YoY decline during March 2019 mainly on account of lower sales of Fortuner & Hilux, which were down 63 percent and 65 percent, respectively, YoY.
The analysts said that this was due to 10 percent Federal Excise Duty (FED) imposed on above 1700 CC engine cars.
Corolla sales posted growth of 2 percent YoY.
Pak Suzuki (PSMC) reported 23 percent YoY growth in sales led by growth in Wagon R with growth of 63 percent YoY.
Other major contributors in overall growth were Cultus, Bolan and Ravi, up by 17 percent, 38 percent and 36 percent YoY, respectively.
Swift was the only PSMC variant to record decline, down 16 percent YoY.
Honda cars (HCAR) sales fell 29 percent YoY in Mar 2019, steepest YoY decline during a month since May 2012. In addition to economic factors, decline in City and Civic variants is attributed to anticipation of a launch of new variant (Civic 1.5 Turbo new variant launched in April-19).
The analysts said that overall demand of automobiles is expected to remain subdued due to recent hike in policy rate (+475bps since Jan 2018 to 10.75 percent), resulting in higher borrowing cost for auto financing.
Furthermore, incremental cost as a result of rupee devaluation & increasing inflation has led to higher car prices, impacting purchasing power of car buyers.
To note, the government is mulling over removal of 10 percent FED on engines with 1700CC above, as per news reports.
However no official announcement has yet been made, adding to the uncertainty to the car sales with engine size of over 1700CC.
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Car sales drop by 4.5 percent in eight months
KARACHI: The sales of locally assembled cars have dropped by 4.5 percent to 162,692 units during July – January 2018/2019 as compared with 170,354 units in the same period of the last fiscal year.
Analysts said that the decline car sales were due to jump in prices and restriction imposed on non-filers to register new cars.
However, the government lifted this restriction through amendments made in Finance Supplementary (Second Amendment) Act, 2019.
Analysts at Topline Research said Pakistan Auto sales are down by 13 percent YoY in February 2019, as against 4.5 percent YoY decrease in January 2019.
Moreover, sales are down 13 percent MoM which can be attributed to lower number of working days in February compared to January.
To note, measures in economic reforms package are expected to support declining volumes, however, volumes will still see a downward trend in months to come, in our view, due to slow down in economy as well as significant jump in prices in last 15 months.
Total sales during 8MFY19 have come in at 163K units, down by 4.5 percent YoY.
Indus Motors (INDU) reported YoY growth yet again (up 8 percent YoY in Feb 2019) as the strong (albeit thinning) order book continues to support sales. Fortuner sales rose 80 percent YoY, first YoY increase in 8 months, while Corolla continued its growth trend with sales up 23 percent YoY.
On the other hand Hilux sales fell 72 percent YoY, highest YoY decline in 19 months.
Pak Suzuki (PSMC) continued to report YoY decline in sales, down by 17 percent YoY in Feb 2019. Sales decline was led by Mehran, Bolan, Swift, Cultus and Ravi variants down by 33 percent YoY, 18 percent YoY, 28 percent YoY, 14 percent YoY and 14 percent YoY, respectively.
Wagon-Rwas the only PSMC variant to record growth YoY (up 16 percent YoY).
Honda cars (HCAR) sales fell 27 percent YoY, worst YoY decline since Apr 2012. This coincides with worst YoY decline in sales of city and civic variants, which fell by 24 percent YoY.
In addition to the economic factors, decline in City and Civic variants can also be attributed to the expected launch of Civic 1.5 Turbo (substitute for Civic 1.8) in coming months.
Simultaneously BR-V sales fell 45 percent YoY. To, note, BR-V sales have fallen YoY for the 10 consecutive month as the variant introduced in Apr 2017 loses its charm with the consumers.
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