1HFY15: Tractor sales rev up

Decrease in GST leads to higher demand; car sales also on the rise.

KARACHI:

The tractor segment witnessed robust growth in sales during the first half of fiscal year 2015, benefitting from the reduction in General Sales Tax (GST), according to a report by Topline Securities.

During the six-month period that ended on December 31, tractor sales surged 9% to 20,857 units compared to 19,057 in the corresponding period last fiscal year, the report said, attributing the rise to the GST concession given in the federal budget.

The GST was revised downwards from 16% to 10%.

Millat Tractors led tractor sales in terms of volume as it sold 12,811 units during the period under review, translating to a year-on-year growth of 12% compared to the corresponding period of FY14. It was followed by Al-Ghazi tractors that also recorded a 12% YoY growth in sales but sold fewer units (7,713).

Following the GST reduction, market analysts had predicted tractors sales to rebound in FY15. AKD Securities had predicted sales of Millat tractors to touch 32,000 units while those of Al-Ghazi tractors could reach 25,000 by the end of FY15.

Car sales

Meanwhile, the Topline report also showed a 25% increase in car sales of local assemblers for the month of December. The industry sold 11,087 units compared to 8,868 units in the same month in 2013. However, on a month-on-month basis, car sales declined 6% due to the year-end phenomenon where buyers wait till January for the new year registration.

“During the first half of FY15, sales surged 10% to 67,426 units compared to 61,252 units in the same period last year, mainly led by Toyota Corolla new model,” the report said.

Indus Motors’ flagship Corolla model saw its sales surge year-on-year in December. The company sold 4,100 units, up 107% compared to 1,982 units in the same month last year. Its sales declined 9% month-on-month, from 4,499 units in Nov 2014. However, during 1HFY15, sales increased by 51% to 22,886 units.



Sales of Pak Suzuki Motors increased 4% to 6,200 units in December on a yearly basis — its volumes also improved 4% on a monthly basis, according to the report.

“We attribute this improvement to invoicing of cabs in December under ‘Taxi scheme’.”

During 1HFY15, sales of PSMC remained fairly stable at 35,656 units compared to 35,492 units in 1HFY14, the report said. On the other hand, the report said Honda Atlas sold 700 units in December, 2014 compared to 655 units in the same month last year, up 7%.

On a month-on-month basis, Honda car sales declined by 45% in December compared to 1,266 units in November, 2014, it said. “During 1HFY15, sales decreased by 14% to 8,588 units. The decline in sales can be attributed to the new model of Corolla and the year-end phenomenon.”

Published in The Express Tribune, January 13^th,  2015.

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