AKD Quotidian about — Auto Sector: Monthly Update
Karachi: Latest statistics revealed by Pakistan Automobile Manufacturers Association (PAMA) reveal growth of 20%YoY in total auto (cars & LCVs) sales in 1HFY12.
According to AKD Securities, Relaxed purchase environment (due to relaxations announced in the budget) versus the previous year led to a growth of 20.5%YoY (to 71,886) in sales of cars, while LCV sales grew by 19%YoY (to 10,058) in the review period. Sequentially however, total auto sales declined by 6%MoM in Dec’11. On the tractors front, sales declined by 61%YoY to stand at 12,665 units in 1HFY12. Going forward, while the auto sector remains exposed to risk of imports and the recent imposition of ban on CNG cars, focus should turn to smaller, lower-priced cars, giving PSMC an edge over its peers. For tractors, with no update on lifting of GST, the outlook remains grim.
|Auto Numbers – 1HFY12|
Cars & LCVs: In 1HFY12 total Cars and LCVs posted sales growth of 20%YoY (to 81,944 units). In this regard, cars sales grew by 20.5%YoY to stand at 71,886 units, while LCV sales grew by 19%YoY to stand at 10,058 units. PSMC continued to outperform the industry sales growth, reporting total sales growth of 32%YoY. The company sold 43,121 cars (up 392YoY) in the review period, with all its variants reporting double digit growth. Besides supply of vehicles for the Punjab Government’s taxi scheme, higher car prices and a ban on CNG fitted cars, makes PSMC’s smaller, lower priced cars more affordable for consumers. While INDU reported sales growth of 10%YoY (to 24,066 unfts), HCAR sales remained flat at 6,861 units. Sequentially, while total car sales declined by 10%MoM (to stand at 9,533 units), LCV sales grew by 27%MoM to stand at 1,684 units in Dec’11.
Tractors: With no update on abolition of GST, tractor sales reported a decline of 61%YoY to stand at 12,665 units in 1HFY12. In this regard, MTL sold 9,005 units (down 56%YoY), while AGTL sold 3,660 units, reporting a decline of 70%YoY. Sequentially, as the harvest period ended and sowing of Rabi began, tractor sales declined by -79%MoM to stand at 771 units in Dec’11 against 3,625 units n Nov’11. Going forward, AKD Securities expects tractor sales to remain depressed in the next few months marking the growth of Rabi crops.