October 2018: Auto sales pick up pace for second month in a row

Industry remains attractive for buyers in anticipation of price hike

KARACHI: Auto sales in Pakistan continued to pick up momentum for the second successive month in October as Corolla, City, Civic, Cultus, Swift and Ravi variants gained buyers’ attention, in anticipation of a further hike in prices.

Pakistan’s auto sales grew 6% year-on-year and 28% month-on-month to 24,850 units in October 2018, according to car sales data compiled by Topline Securities.

“Price hike anticipation, owing to currency devaluation and higher input costs, may have also encouraged customers to get into early purchase, we believe,” Topline analyst Syed Daniyal Adil said.

Besides, sales remained high due to higher number of working days in October compared to September. “To note, volumes had fallen in July and August 2018, but were up 3% year-on-year in September 2018,” he said.

In the first four months (July-October) of the current fiscal year 2018-19, car sales showed a flat growth.

“We maintain our sluggish auto demand outlook due to a deteriorating macroeconomic environment, multiple price hikes since December 2017 and the impact of law requiring car purchasers to be tax return filers, in our view,” he said. “The slowdown in demand will be more apparent post-December 2018, in our view,” he added. The increase in automobile prices due to the latest round of rupee depreciation (including 8% in October) also gives credence to the forecast of volumetric decline in coming months as cars become more expensive.

Company-wise sales

Indus Motor (INDU) led the growth chart with sales volume up by 25% year-on-year. Similarly, on a sequential basis, volumes increased by 30% month-on-month, while for 4MFY19, sales were up 8% year-on-year.

Notably, INDU recorded second highest monthly sales number in its operational history, where the company had last recorded its highest-ever monthly sales in January 2015 with 6,415 units compared to 6,409 units in October 2018. “Within the variants, Corolla sales were up 33% year-on-year. On the other hand, Hilux and Fortuner sales declined by 6% and 23% year-on-year, respectively,” the analyst said. 

Published in The Express Tribune, November 13^th, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.