KARACHI: Local car assemblers, including LCVs, Vans and Jeeps, managed to sell 18,798 units in September 2017, an increase of 17 per cent YoY, despite a contraction of 15 per cent on a sequential basis. These numbers are in line with our estimates due to fewer working days in September due to EID holidays, said Pakistan Automotive Manufacturers Association (PAMA).
Cumulative industry sales during the first three months of fiscal year 18 exhibited 27 per cent growth to 60,470 units which are on track for our full-year target of 236,000 unit sales.
Looking at OEM’s individually, Honda (HCAR) continues to outperform peers in terms of 24 per cent YoY growth of in September due to the success of new models Civic & BRV. Albeit sales lagged on a monthly basis (-27 per cent) as Honda’s plant was shut down for a longer period (compared to others) due to clumping of Eid and Muharram holidays. In the first quarter, 2017-18 Honda’s sales grew 56 per cent to 12,606 units.
Suzuki’s (PSMC) sales were up 22 per cent YoY as price-conscious models Mehran (+43 per cent YoY), WagonR (+60 per cent), & Cultus (+33 per cent) all exhibited healthy growth. Cumulative Q1 sales were up 30 per cent YoY for PSMC to 32,777units.
Toyota’s Indus Motors (INDU) lagged behind peers with only 4-5 per cent growth in September Q1 due to production constraints.
Tractor sales continue to exhibit upward trajectory with sales growing by 74 per cent YoY in September 2017. Al-Ghazi tractor (AGTL) outperformed Millat Tractor (MTL) exhibiting 118 per cent growth vs. the latter’s 72 per cent. During Q1FY18 tractor sales have doubled to 15,710units. Going forward we expect lower GST on tractor purchase, fertilizer cash subsidy, along with Rs 2 billion subsidies for farmers on tractor purchase recently announced in FY18 Sindh provincial budget to improve farmers purchasing power and thus improve overall tractor sales going forward.
Truck & bus sales of PAMA member companies in September 2017 remained strong, growing by 37 per cent YoY, while during Q118 sales rose 23 per cent YoY. We foresee this trend to continue fueled by CPEC, higher road connectivity, low financing rate, change and enforcement of axle load limit per truck on highways by National Highway Authority.
Motorcycle/3-wheeler sales for September 2017 have grown by 16 per cent YoY, due to rising disposable income of lower middle class. Cumulative Q1 sales are up 28 per cent YoY.