Car sales improve 21% in April

Islamabad –– Car sales for the month of April 2011 improved by 21% to 15,690 units compared to 12,969 units sold in the same period last year, according to the latest data released by Pakistan Automotive Manufacturers Association (PAMA). While on MoM basis, sales remained flat on account of slowdown in deliveries amid production concerns.

Company wise numbers shows that, volumetric sales for PSMC declined by 9% MoM to 8,745 units compared to 9,626 units in March’11. This is due to higher base affect amid delivery of past booked vehicles in the previous month (CNG kit issues). In contrast, INDU posted improvement of 4% to 4,434 units.

Thus with these numbers, industry sales in 10MFY11 depicted an improvement of 14%YoY. Pak Suzuki continued to perform well in 10MFY11 evident by the sales growth of 20% to 70,438 units compared to 58,644 units in same period last year. PSMC continued to show better sales amid gradual improvement in urban economy. This was followed by Indus Motor where sales during this period increased by 4% to 41,693 units compared to 40,062 units in same period last year.

Though sales have continued to grow gradually despite flood affect seen in this fiscal year, shrinking gross margins amid rising yen against Pak rupee would remain a key concern for the local assemblers. Besides margin issues, non availability of CKDs after Japan crisis has raised concerns over future production of local car assemblers. We maintain ‘Hold’ and ‘Sell’ stance on INDU and PSMC at current levels.

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