The MoM decline was mainly attributed to the seasonal ease in sales after high sales at the start of the year due to the ‘New Year Model’ phenomenon. CREATIVE COMMONS
KARACHI: Pakistan local car sales (including LCVs, Vans and Jeeps) during the first nine months of fiscal year 2013-14 (9MFY14) have clocked at 100,220 units, 4% higher compared to 96,323 units in the same period last year.
However, on a month-on-month (MoM) basis, locally manufactured car sales have declined to 12,269 units in March 2014, down 4.1% versus 12,789 units in February 2014 and by 8.1% year on year (YoY).
The MoM decline was mainly attributed to the seasonal ease in sales after high sales at the start of the year due to the ‘New Year Model’ phenomenon.
However, customers’ expectations of price cut from carmakers after the recent rupee appreciation against the dollar had also caused year-on-year decline in sales.
“We believe buyers deferred their buying decision due to the expected fall in car prices,” Topline Securities reported. “The growth during 9MFY14 was slightly below our estimation and we expect improvement in volumes due to reduction in car prices from all three players.”
Among individual companies, Pak Suzuki (PSMC) – the largest carmaker with 56% share – sales remained almost stable at 55,514 units during 9MFY14 compared to 55,428 units in the last year. However, on monthly basis, PSMC sales declined to 5,992 units in Mar 2014, down 13.7% MoM and 15.6% YoY.
PSMC, which reduced its prices by 1-3%, was the last company to reduce prices, after Indus Motors and Honda Atlas Cars had already reduced their prices.
During 9MFY14, Indus Motor (INDU) – the carmaker with 27% share – sales increased by 3.5% to 26,727 units as compared to 25,826 units in 9MFY13. Improvement in sales is contributed by 3% increase in ‘Toyota Corolla’ sales to 23,026 units in 9MFY14.
During March 2014, INDU sales improved by 15.6% MoM and 1.8% YoY to 4,051 units. We link the increase in INDU volumes to timely reduction in car prices, the report added.
Honda Cars (HCAR) – the carmaker with 17% share – sales surged by 13.8% YoY to 16,792 units in 9MFY14. During March 2014, sales of HCAR decreased by 11.7% MoM to 1,971 units. Moreover, volumes declined by 11.5% YoY from 2,228 units in March 2013.
Published in The Express Tribune, April 12th, 2014.
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