Auto sales accelerate 66% in first six months

Sales rise to 111,720 units in 1HFY16 from 67,426 units in the same period of previous year


Farhan Zaheer January 11, 2016
PHOTO: REUTERS

KARACHI: Locally produced automobile sales (including light commercial vehicles, vans and jeeps) jumped 66% in the first six months (Jul-Dec) of fiscal year 2015-16 (1HFY16) compared to the same period of last year, according to data of the Pakistan Automotive Manufacturers Association (Pama).

Auto sales increased to 111,720 units in 1HFY16 from 67,426 units in the same period of last year due to improvement in the overall economic situation, rise in auto financing and the Punjab Taxi Scheme.

Local car sales rev up 66%

“We expect auto sales to remain strong in the next half despite the fact that the Punjab Taxi Scheme is going to end in the next few months,” Sherman Securities analyst Sadiq Samin commented.

All the three carmakers in the country increased prices by 1% to 1.5% to pass on the impact of 1% increase in customs duty on imported parts in December 2015, which was part of a government drive to generate additional revenues of Rs40 billion from different sectors.



Car assemblers passed on the increase in cost easily due to strong vehicle demand in the country, Topline Securities reported.“We now forecast local car sales to grow at 15% to reach 206,777 units by the end of June 2016. This lower growth is due to the completion of taxi scheme in February 2016 and decline in Civic volumes in anticipation of a new model, which is expected to hit the market in July 2016,” the report added.

Auto sector: Car sales surge 28% during 10MFY15

Sales of Pak Suzuki Motor - the largest carmaker in the country - increased 97% year-on-year (YoY) to 70,482 units in 1HFY16 primarily due to the Punjab Taxi Scheme.

Contrary to the historical trend, volumes rose 3% month-on-month (MoM) in December 2015 because of the taxi scheme. Historically, it has been observed that customers defer buying plans in December due to the year-end phenomenon as they prefer to purchase and register vehicles in the first month of the new year.

Indus Motor - the maker of Toyota Corolla - sold 30,481 units in 1HFY16 versus 22,883 units in 1HFY15. In December 2015, sales stood at 4,738 units, up 16% YoY. On MoM basis, sales declined 14% due to the year-end phenomenon.

Honda Atlas Cars sold 10,610 units in 1HFY16 compared to 8,578 units in the same period last year. In December 2015, the company sold 1,028 units, up 49% YoY (down 33% MoM).

Pakistan's Japanese-dominated car market poised for new entrants

Analyst believe sales volume of Honda Civic is expected to dry out in coming months in anticipation of a new model launch in July 2016.

Taurus Securities commented that it remains optimistic about auto volumes and believes sales will cross 215,000 units in FY16 owing to the Punjab Taxi Scheme, stable Corolla sales and recovering demand for Honda Atlas Cars.

Moreover, improving GDP outlook, rising income levels and lower interest rates in addition to banks’ focus on high-return auto financing would further improve automobile demand.

Published in The Express Tribune, January 12th, 2016.

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COMMENTS (3)

Parvez | 8 years ago | Reply What is the percentage of cars with ' green ' number plates ?........peoples money going to bolster the ego's of two-bit bureaucrats / politicians who keep upgrading their cars ( many have as much as 5 cars or more at their disposal ).
Dire Tide | 8 years ago | Reply What about new generation Honda City ? It's been out in the rest of the world 2 years more then the new generation Civic has been out.... What a shame !
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