AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, June 12, 2012 (PPI-OT): According to recent statistics released by PAMA, sales volumes of the auto industry (Cars and LCVS) have grown by 15.1%YoY in 11MFY12 to 159,975 units.
According to AKD Securities, car sates showed a growth of 16.1 %YoY to 141,015 units in the review period. On a sequential basis, industry volumes for May’12 were up by 12.2%MoM while car segment sales was also up by 11.8%MoM. Seasonal uptick coupled with ramping up of production of HCAR’s City model boosted car sales in May’12, where HCAR sales for the month were up by a significant 52.9%MoM.
| 11MFY12 Sales Volumes | ||||||
| (Units) |
11MFY12 |
11MFY11 |
YoY |
May12 |
Apr12 |
MoM |
| Industry Performance |
|
|
|
|
|
|
| Cars |
141,015 |
121,455 |
16.1% |
14,934 |
13,360 |
11.8% |
| LCVs and Pickups |
18,960 |
17,522 |
8.2% |
1,676 |
1,438 |
16.6% |
| Tractors |
41,377 |
62,251 |
-33.5% |
6,913 |
6,295 |
9.8% |
| Company Wise |
|
|
|
|
|
|
| PSMC |
100,805 |
77,180 |
30.6% |
10,608 |
8,837 |
20.0% |
| INDU |
48,907 |
46,145 |
6.0% |
4,846 |
5,203 |
-6.9% |
| HCAR |
9,901 |
14,698 |
-32.6% |
1,150 |
752 |
52.9% |
| Source: PAMA and AKD Research | ||||||
Pak Suzuki Motors Company (PSMC): PSMC posted the highest growth in sales during 11MFY12, with total sales of 100,805 units, up 30.6%YoY. Similarly, PSMC’s market share during the review period has also increased to 63% from 56% last year. Mehran and Bolan have shown increase of 39.4%YoY and 53.8%YoY, respectively in 11MFY12 with sales boosted by the Govt. of Punjab Taxi scheme, while Swift is also gaining traction with sales rising by 67.3%YoY to 6,412 units. In May’12, sales of the company were recorded at 10,608 units, up 20%MoM. With the announcement of the Provincial Budget of Punjab for FY13, the Punjab Government has stated to continue the Yellow Cab scheme into FY13 and in this regard will distribute another 20,000 yellow cab units. The announcement to continue with the yellow cab scheme will be more beneficial for PSMC. The company has implemented EURO-II standards on its previously non-compliant models and in this regard has increase the prices of Mehran, Bolan and RAVI by PkR35k/unit each in the previous week.
Indus Motor Company (INDU): The Company posted 6%YoY growth in 11MFY12 while MoM sales declined by 7% to 4,846 units. The fall in sequential sales was due to the discontinuation of the ‘Cuore’ model where May’12 sales of ‘Cuore’ were down 80%MoM to just 63 units, while heavy weight Corolla sales were up slightly by 36%MoM. In 11MFY12, Corolla has recorded sales of 41,720 units up 9%YoY, Cuore sales were down by 36%YoY at 3,562 units while Hilux sales of 3,625 units were up by a robust 56%YoY following introduction of the `Vigo Champ’.
Honda Atlas Cars (HCAR): HCAR recorded sales of 9,901 units in 11MFY12, down 33%YoY as production was hampered due to supply chain disruptions from floods in Thailand last year. However, production levels are returning back to normalcy and in this regard HCAR sales were up by 53%MoM to 1,150 units in May’12, where ‘City’ sales were up by 6.8xMoM to 1,050 units.
Tractors: While industry tractor sales for 11MFY12 are down by 34%YoY to 41,377 units, sales have been gaining momentum since the reduction in GST to 5% in mid-Jan’12. Industry sales for May’12 were up by 98%MoM to 6,913 units, while compared to May last year, sales are up by 10.6%. On a company wise basis, AGTL and MTL sales were down by 41.6%YoY and 28.0%YoY, respectively however on a sequential basis sales were up by 20% and 4%.
Motorcycle/Three Wheelers Division: The segment posted flat sales growth with 760k units sold during 11MFY12. For the month of May’12 sales of 71.6k units were up 8%MoM. Given increasing petrol/CNG prices, load shedding of CNG and stalled auto financing, low end consumers are more likely to switch from cars to motorcycles. Given the healthy outlook for the segment, Atlas Honda (ATLH) is reportedly considering investing US$50mn to increase motorcycle capacity to 1mn units/year from the current capacity 0.7bmn/year. Recall, ATLH last year invested US$35mn to increase capacity by 25%.
FY13 Budget Implications: Budget FY13 was positive for the auto sector given the status quo maintained on the import duty of CBUs. Custom duty on imported CKD units has been reduced by 5% to 30% which will reduce manufacturing costs for local assemblers. The advance tax on 1300cc-1600cc vehicles has been raised by PkR8,125/unit to PkR25k/unit, which is a slight negative for INDU but positive for PSMC given its dominance in the economy category (below 1300cc).