Auto sales speed up to 74,541 units

All carmakers boast higher sales; car financing contributes to growth

KARACHI: Local auto sales (including light commercial vehicles, LCVs) have shown a significant climb during the first four months of the fiscal year, boasting a surge of 67% from 44,550 units during July-October last year to 74,541 units this year.

Data released by the Pakistan Automobile Manufacturers Association (PAMA) shows all three major carmakers saw an increase in volume.



“Local car sales are benefitting from car financing, which is on the rise due to aggressive marketing,” Global Research analyst Asad Raza Nayani said.

When asked about the expectations of sales in the near future, he said everything is going good for the automobile sector, but sales may take a hit in November and December mainly because of the year-end phenomenon.



Car sales usually remain low in the last two months of the year as people wait for January to buy the latest car models.



“This increase is on the back of improving macroeconomic indicators, continuously falling inflation and interest rates,” Sherman Research commented in its report on Wednesday.

Breakdown

Sales of Pak Suzuki - the largest carmaker in the country -  increased by 96% year-on-year (YoY) from 23,500 units to 46,100 units during the first four months of fiscal year 2015 primarily because of Punjab taxi scheme.

Major factor for improved sales volume is due to sales of Suzuki Bolan and Suzuki Ravi to Bank of Punjab under ‘Apna Rozgar Scheme’ of Punjab government. During the first four months (Jul-Oct) of fiscal year 2015, approximately 16,000 units were sold under this scheme.



Indus Motor - the makers of Toyota Corolla - saw sales go up by 42% year on year to 20,200 units, mainly due to strong sales of new generation of Corolla. Moreover, Honda Cars sales also increased by 22% year on year to 8,100 units.

Monthly statistics during October 2015 show that auto sales (including LCVs) are up by 7% to 19,700 units. Leading companies, such as INDU, are up by 10% month-on-month (MoM) to 5,500 units, followed by Pak Suzuki with volumetric sales of 8% MoM to 12,300 units. However, Honda Cars sales were down by 6% MoM to 1,900 units.

In fiscal year 2015, car sales surged by 31% on the back of the new model of Toyota Corolla, Punjab taxi scheme and an increase in car financing owing to 42-year low interest rates in the country, Topline Securities in its report on Wednesday said.



“We now forecast local car sales to grow at 13% in fiscal year 2016 to reach 203,941 units. The growth will decline due to the completion of taxi scheme in February 2016 and decline in Honda Civic volumes in anticipation of new model which is expected to hit the market in July 2016,” it added.

Published in The Express Tribune, November 12^th, 2015.

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