Sales of local car assemblers (including light commercial vehicles (LCVs), vans and jeeps) increased by 57% year on year (YoY) during the first seven months (Jul-Jan) of fiscal year 2015-16 (7MFY15-16), according to data released by the Pakistan Automotive Manufacturers Association (PAMA).
“Car sales have been growing extraordinarily due to better economic situation and the Punjab taxi scheme orders to Pak Suzuki,” Sherman Securities analyst Sadiq Samin commented. However, according to officials in Pak Suzuki – the country’s largest carmaker – the company has to make just 500 more units to complete the order of 50,000 vehicles of Punjab taxi scheme.
“This means that Pak Suzuki sales as well as the overall car sales are going to take a hit February onwards until the end of fiscal year in June 2016,” said Samin.
“The rise in auto financing due to 42-year low interest rates, Punjab taxi scheme, improving security situation and overall improvement in economic situation in the country have been supporting car sales,” said a report of Topline Securities.
During 7MFY16, local vehicle sales stood at 133,437 units compared to 85,135 units in the same period of last year.
“We now forecast local car sales to grow at 15% in FY15-16 to reach at 206,777 units. This lower growth is due to expected completion of Punjab taxi scheme in February 2016 and decline in Honda Civic volumes in anticipation of new model, which is expected to hit the market in mid-2016,” the report added.
Amongst individual companies, Pak Suzuki sales increased by 90% year on year to 83,188 units in 7MFY16 primarily due to Punjab taxi scheme. Volumes increased 59% year on year (+3% month on month) in January 2016 primarily due to the taxi scheme. Contrary to historical trend of high growth in the month of January 2016, PSMC volumetric growth in January 2016 remained 3% due to high base of December 2015 due to taxi scheme.
Indus Motor sold 36,448 units in 7MFY15-16 compared to 29,298 units in 7MFY14-15.
In Jan 2016, Indus sales stood at 5,967 units, down 7% year on year due to high base of last January because new model of Corolla was launched last year. On month on month basis, sales increased by 26% due to new car registration phenomenon.
It is important to note that delivery time for new Corolla model is still hovering in the range of 2-4 months depending on the variant. Honda Atlas Cars sold 13,625 units in 7MFY15-16 compared to 11,799 units in the same period last year. In Jan 2016, Honda Cars sold 3,015 units, down 6% year on year (up 193% month on month). Topline report said that Honda City remained the major contributor in this growth.
Published in The Express Tribune, February 12th, 2016.