KARACHI: The sale of automobiles including LCVs, Vans and Jeeps managed to sell 218,301 units in the last ten months (July-April 2017-18), up 23 per cent Year on Year (YoY) and increased 14 per cent on Month on Month (MoM) basis.
The sales of automobiles grew to 25,567 units, up by 39 per cent YoY in April 2018.
According to the latest figures released by the Pakistan Automotive Manufacturers Association (PAMA), the change in import procedure as well as demand from online ride hailing services have contributed to strong demand in the outgoing month.
Pak Suzuki (PSMC) continues to be a major beneficiary as a majority of used car imports fall under lower engine capacity segment. PSMC exhibited robust growth where sales rocketed 30 per cent YoY. Once again car sales during the month kept the momentum uphill, led by PSMC as the company sold the entire inventory of prior months and posted the highest ever sales of 14,781 units in April this year.
In the 1300cc and above category, sales displayed a meagre drop of 3 per cent MoM while posting a growth of 18 per cent YoY to 9,523 in April 2018 amid 35 per cent YoY decline in sales of Civic/City.
In 1,000cc category, Wagon R and Cultus caught buyer’s attention and managed to post a massive growth of 106 per cent YoY and 66 per cent YoY, respectively.
In the below 1,000cc category, Mehran sales registered an increase of 21 per cent YoY / 19 per cent MoM to 4,648 units. On a monthly basis, Wagon R, Ravi, Bolan, Mehran and Swift sales managed to remain positive and posted a growth of 66 per cent, 44 per cent, 43 per cent, 19 per cent and 15 per cent, respectively.
Honda’s (HCAR) sales recorded a handsome growth of 31 per cent YoY to 4,603 units in April 2018 largely on the back of robust demand from Honda Civic and Honda City, which increased 1,053 units YoY and increased BR-V sales in Apr’18 (+31 units YoY).
Furthermore, increasing production capacity to 200 units/day from previous 180 units/day helped in the uptick as well. HCAR volumes dropped by 14 per cent MoM. Industry analysts expect improving volumes in coming months as current delivery periods stand tall at 5–7 months.
INDU sales sold 6,183 units in April 2018, depicting a 10 per cent YoY increase. Toyota Corolla volumes rose by 4 per cent YoY owing to enhanced capacity. While Hilux volumes mounted by 6 per cent YoY to 714 units in April 2018. INDU’s Fortuner posted an enormous hike in sales, jumping 1.5x YoY (+311 units YoY).
Looking forward, analysts expect volumes to improve in the coming months on account of the de-bottlenecking and upgrades to the Hilux and Fortuner models.
Tractor sales continue to perform well registering a highest ever dispatch of 7,979 units for the month, up by 27 per cent YoY against 6,263 units in the same period last year. Main support to the segment was offered by AGTL and MTL, which increased their sales volume by 35/24 per cent. Analysts attribute this jump to reduced GST rates and improving agronomics.
Furthermore, motorcycles and three-wheelers also witnessed a sharp increase of 35 per cent YoY, and 4 per cent MoM. ATLH reported 37 per cent YoY and 6 per cent MoM upticks in off-take in April 2018.
Industry analysts forecast volumes for the sector to remain high in the coming months on the back of introduction of new CKD and CBU models (Daehan Shehzore, JAC X200, Mega Carry, Hybrid Camry etc) and new engine options (Fortuner and Hilux).
However, we foresee the current exorbitant growth rates to come down a few notches when the budget proposal to limit non-filers from the purchase of new vehicles is imposed.
Also, interest rates still hover at low levels for the short term, at least (as of March 2018, auto financing stands at Rs185 billion, growing by 34 per cent YoY against Rs138 billion in the same period last year, which would still continue to trigger auto off-takes significantly.
Furthermore, in the longer run, the introduction of new players (Kia, Hyundai, Renault, Ssangyong, Volkswagen etc), would contribute towards growth in volumes for all segments.