Car sales up 28 percent in July-August; above estimates

KARACHI: Sales of passenger cars in the country have posted an increase of 28 percent in the first two months of FY18, according to Pakistan Automotive Manufacturers Association (PAMA) data released on Tuesday.

“These numbers are above our estimates. We attribute this increase to string of new models and facelift introduced recently propelling sales,” a report by Topline Securities said.

PAMA said 35,002 units were sold in July-August period, against 27,317 sold the same period last year. In August 2017, a total of 22,000 units, including LCVs, vans, and jeeps were sold, showing an increase of 25 percent year-on-year.

A total of 1,946 LCVs, vans and jeeps were sold, up several times against sales of 111 units of the category sold in the same period last year. This period saw a total sale of 4,724 pick-ups against 4,157 units sold during the corresponding period in 2016.

“Sales of Honda have outperformed peers, posting 47 percent, YoY growth. These are the highest monthly sales in history of the company at 4,666 units due to successful introduction of new Civic model and new SUV variant BR-V,” the Topline report said.

Indus Motors sold 5,541 units an uptick of two percent YoY. The company’s focus remained on production of higher margin Fortune whose sales have shown stellar growth of 284 percent YoY. “Buyers have resumed purchase of corollas which have shown YoY growth of five percent post the recent model facelift,” the report added.

A total of 17,145 cars of 1300cc or above category were sold during this period, up 20.45 percent against 14,234 units sold during the same period last year. Under the 1000cc category, a total of 7,807 units of Suzuki Cultus and Suzuki WagonR were sold, up 72 percent against 4,542 units sold last year.

Sales of 800cc to 1000cc cars, Suzuki Mehran and Bolan, increased 17.6 percent to 10,050 units from 8,541 units last year. A total of 1,653 buses and trucks were sold in these two months, up 16.8 percent against 1,415 units sold during the corresponding period last year. According to Topline Securities, this was fuelled by China-Pakistan Economic Corridor-led growth, higher road connectivity, lower financing rate, and change and enforcement of axle load limit per truck on highways by National Highway Authority.

Farm tractors recorded a growth of 119 percent in sales to 9,757 units during this time, compared to 4,446 units during the same period last year. AL Ghazi tractor (AGTL) has been the top performer in this segment with robust monthly sales growth of 26 percent.

“We expect lower GST, improving crop yield due to Punjab Government Kissan Package and continuation of fertiliser subsidy to improve farmers’ purchasing power,” an analyst at Topline Securities said. He pointed out that in Budget FY18, the Sindh government set aside Rs2 billion in subsidy for farmers on tractor purchase. Motorcycles and three-wheelers sold 35 percent higher with 325,001 units sold during this period when compared to 239,916 units sold last year.