Car sales speed up by 89%

Volumetric surge was mainly on the back of taxi scheme

KARACHI: Local car sales in the first two months (July-August) of 2015-16 stood at 36,388 units, up 89% on a year-on-year (YoY) basis, according to the Pakistan Automotive Manufacturers Association (PAMA) on Thursday.

The volumetric surge was mainly on the back of the taxi scheme launched by the Punjab government along with an overall improving economic situation in the country, a Topline Securities note said on Thursday.

In addition, the low-base effect in the case of Toyota Corolla as well as a cut in interest rates that resulted in enhanced car financing during the period also led to higher sales in July-August, according to a Global Securities analyst.

The tractor segment posted a decline of 36% YoY to 3,649 units, Topline Securities noted, because farmers waited for the implementation and execution of the announced subsidy schemes by Sindh and Punjab governments.



The highest increase in volumetric sales was recorded by Pak Suzuki whose sales went up 107% YoY to 22,381 units in July-August. “We estimate the profitability of Pak Suzuki to grow by 139% YoY in 2015 on the back of volumetric growth and weakening of yen against the dollar,” Topline Securities said.

As for Indus Motor, it appears the new model of Toyota Corolla is still selling like hotcakes. Its volumetric sales in the first two months of the fiscal year went up 89% YoY to clock up at 9,783 units.

Sales of Honda Cars clocked up at 4,183 units in July-August, up 33% YoY. “Our channel checks suggest that the company has shelved its plan to launch Honda City in 2016,” Topline Securities said. The company will launch the new model of Honda Civic instead, which will lead to volumetric and earnings growth, it added.

Published in The Express Tribune, September 11^th,  2015.

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