Auto Sector registers 13 percent growth YoY

Karachi: Latest auto statistics reveal a growth of 13%Y0Y in auto (Cars & LCV5) sales to 125,768 units in 10MFY11.

According to AKD Securities Limited, cars sales recorded a growth of 12%Y0Y to stand at 109,976 units while sales of LCVs grew by 14%YoY to stand at 15,792 units in the review period. Sequentially however, total auto (Cars & LCV5) sales declined by 11%MoM in Apr’11. Both cars and LCVs registered respective declines of 10%M0M and 18%M0M in the month under review. Tractors sales posted a decline of 3%Y0Y to stand at 56,003 units in 10MFY11. While possible regulatory decisions and import of used cars stand to limit sequential growth in auto sales, Kharif harvest may form the basis of gradual improvement in demand going forward.

Cars & LCVs: High volumes in PSMC (up 18%YoY) and surge in HOAR sales (up 26%YoY) led to a growth of 13%YoY in total auto sales (Cars & LCV5) in 10MFY11. Despite a growth of 5%YoY in INDU sales, its market share declined by 300bps to 33% in the review period. The 12%YoY growth in cars sales comes on the back of growing popularity of Swift (sales up 93%YoY) and 23%YoY growth in sales of Daihatsu Cuore. LCVs on the other hand registered a growth of 14%YoY to 15,792 units. Growth in auto sales seems to have emerged from higher farm incomes on the back of a surge in commodity prices and improving economic dynamics. Sequentially, auto sales have registered a decline of 11%MoM to 13,916 units in Apr’11 (high base effect).

Tractors: In 10MFY11, tractor sales have posted a decline of 3%YoY to stand at 56,003 units. MTL’s aggressive marketing campaigns led to a growth of 200bpsYoY in its market share to 59%. 1n the period under review, MTL posted flat sales of 33,093 units in 10MFY11 against 32,736 units sold in the same period last year. AGTL’s volumes, however declined by 8%YoY to stand at 22,910 in 10MFY11, due to target market being more affected by the Aug’10 floods. Sequentially however, tractor volumes grew by 8%M0M to 5,452 units with MTL posting a volumetric growth of 53%M0M (3,377 units sold- low base effect) and AGTL posting a decline of 27%MoM to 2,075 units. Going forward, AKD Securities Limited expects tractor volumes to remain stagnant until the next harvest. However, AKD Securities Limited conviction towards MTL becomes stronger as the company’s effective expansion in Sindh continues to bear fruit in form of higher volumes.

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