Dear Clients,
According to data released by Pakistan Automobile Manufacturers Association (PAMA), the automobile industry saw vehicle sales at 17,233 units during Apr’21. On a sequential basis, the sales slowed down by 17% MoM owing to the advent of Ramadan and ensuing limited activity. However, on a cumulative basis, vehicle sales reached 151,951 units for Jul’20-Apr’21 period, up by 54% YoY. This makes up 83% of our FY21 projected industry sales of 184k units.
On a YoY basis, the imposition of lockdown because of the COVID-19 pandemic outbreak meant near-zero vehicles were sold last year. Apr’20 was notably the hardest hit month from the imposed restrictions. In contrast, Apr’21 has witnessed a phenomenal increase in sales. To note, a resurgence of demand and pent-up sales have taken trailing 12-month cumulative sales to over 165k units. Passenger car sales during the month stood at 14,435 units, down by 16% MoM while LCV and 4x4s sales stood at 2,798 units lower by 25% YoY.
– Indus Motors (INDU) saw a slower rollout of vehicles after its best production month in Mar’21. The company saw vehicle sales of 5,355 units sold for the month, a decline of 20% M/M, led by Yaris and Fortuner variants. Cumulative sales for 10MFY21 stood at 48,025 units (up by 90% YoY). INDU has led the local OEMs in terms of growth owing to the timely launch of Toyota Yaris.
– Honda Atlas Cars (HCAR) saw a sequential drop in sales during the month to 2,287 units as compared to 3,153 units in the previous month. The 27% MoM decline was a result of lackluster sales across its model line-up. During the month, only 234 units of BRV were sold as compared to 550 units last month. City/Civic sales also saw a dip to 2,053 units sold as compared to 2,603 units sold in Mar’21. On a YoY basis, cumulative sales stood at 23,985 units during 10MFY21, a rise of 71%.
– Pak Suzuki Motor Company (PSMC) sold 8,606 units in Apr’21, down 15% MoM. Bolan, Ravi, and outgoing Swift emerged as a laggard for the company cumulatively causing sales to slow down by 30% MoM. On a cumulative basis, Alto, WagonR, and Cultus reported a strong increase in sales. As a result, PSMC managed to report a 28% decline in sales for 10MFY21.
– Hyundai Tucson came off by 18% MoM to 503 units sold. The launch of Elantra in Mar’21 is already seeing a strong run-up with 280 units sold in its second month of launch. Moreover, Porter depicted an increase of 77% MoM.
– Tractor sales have recorded a dip of 19% MoM led by Al-Ghazi Tractors reporting sales of 1,287 units. On the other hand, Millat Tractors saw a sale of 3,214 units for the month.
– The incoming model launches across various segments and a low interest rate environment is expected to keep activity in the automotive sector healthy. The expected launch of Honda City this month and reveal of Hilux and Fortuner facelift may help the sector record its best quarter in a while. We have an Outperform stance on the sector as volumes are expected to depict sustainability after thoroughly recovering from the peak-Covid lull. We do not see competition to displace the volumetric outlook of the Japanese 3. We prefer INDU, PSMC, and HCAR.
Regards,
KASB Research
