LAHORE: The sales of trucks and buses have posted an increase of 40pc annually to reach at 3,803 units during eight months of the current fiscal year mainly due to surge in demand to China Pakistan Economic Corridor (CPEC) and improving law & order situation in the country.
According to the latest figures, local car assemblers registered 46 percent growth during the last eight months of FY16 owing to rise in auto financing due to 42-year low interest rates, taxi scheme and overall improvement in economic situation in the country. During the corresponding period, the local vehicle sales reached 149,311 units from 102,491 units in the same period last year.
Experts forecast local car sales to grow at 15 percent in FY16 to reach at 206,777 units. This lower growth is due to 1) completion of taxi scheme in Feb 2016 and 2) decline in Civic volumes in anticipation of new model, which is expected to hit the market in mid 2016.
Amongst individual companies, Pak Suzuki (PSMC) sales increased by 71 percent YoY to 91,608 units in 8MFY16 primarily due to Punjab Govt. Taxi Scheme. Volumes decreased by 16 percent YoY (-34 percent MoM) in Feb 2016 to 8,420 units primarily due to completion of Taxi Scheme. Indus Motors (INDU) sold 41,723 units in 8MFY16 versus 34,375 units in 8MFY15.
In Feb 2016, INDU sales stood at 5,275 units, up 4 percent YoY due to high number of working days in the month of Feb. On MoM basis, sales decreased by 12 percent YoY due to early buying in the month of Jan owing to New-year registration phenomenon and less working days in Feb 2016 compared to Jan 2016.
Honda Cars (HCAR) sold 15,793 units in 8MFY16 compared to 14,041 units in the same period last year. In Feb 2016, HCAR sold 2,168 units, down 3 percent YoY (-28 percent MoM). We believe that Honda City remained the major contributor in this growth. Volumes of Honda Civic are expected to dry out in coming months in anticipation of new model launch in mid 2016.
Pakistan tractor segment posted a decline of 37 percent YoY during 8MFY16 to reach at 17,772 units. We attribute this decline to the delay in the launch of provincial tractor subsidy schemes. To recall, Punjab/Sindh Govt. in Budget FY16 announced subsidy of 25,000/29,000 tractors.
Millat tractors (MTL) and Al-Ghazi tractors (AGTL) both witnessed a decline in their volumes during 8MFY16. Industry sources revealed that farmers are waiting for the execution of announced subsidy schemes by Punjab and Sindh Govt. On the other hand, tractor manufacturers are requesting Govt. either to execute or shelve the announced scheme so that farmers resume their normal purchasing.
MTL sold 10,984 units in 8MFY16 compared to 17,400 units in the same period last year. Sales of the company decreased by 26 percent YoY to 1,806 units in Feb 2016. However, it seems that farmers have resumed their normal purchasing as sales increased by 43 percent MoM.
