Car sales increase in Pakistan by 17 per cent as compared to last year

ISLAMABAD: Pakistan car sales during 7MFY12 increased by 17% to 96,922 units compared to 82,767 units in same period last year. The improvement in volumetric sales is on account of 1) Yellow cab scheme announced by the Punjab government and 2) deferred sales from June to July because of reduced tax structure in Federal Budget FY12.

According to Topline Securities analysis report released on Friday, in January 2012, car sales improved by 34% to 14,991 units as compared to 11,214 units in December 2011 due to year-end deferred sales phenomenon. However, sales grew by a mere 2% as compared to same month last year.

On company wise basis, PSMC continued to depict strong growth of 33% in 7MFY12 to 60,159 units versus 45,113 units seen in same period last year. The company is benefiting from the announced yellow cab scheme, with Mehran and Bolan showing an impressive growth of 40% and 43%, respectively. Moreover, sales of Swift has reached 3,847 units in 7MFY12, depicting a growth of 95%. As regards to company’s market share it has expanded to 62% in 7MFY12 as against 55% in the same period last year.

Indus Motors sales increased by a minuscule 4% to 29,462 units compared to 28,293 units in 7MFY11, with Corolla that is company’s flag product showing an increase of only 5%. Though the company launched the new variants of Corolla in 1600cc segment and CNG vehicles (Eco), sales are being adversely affected by reduced farmer income this year on account of higher input cost (fertilizer and others) and reduced product prices particularly cotton. Overall, company’s market share dipped by 4% to 30% in the period under review.

Despite recovery in volumetric sales, strained margins on account of continuous appreciation of Japanese yen and high regulatory risk we maintain “Market-weight” stance on local assemblers.

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