Auto production falls in Pakistan

According to the latest data released by Pakistan Automotive Manufacturers Association (PAMA), total passenger car and LCV sales for Nov’19 clocked-in at 9,840 units recording a decline of 10% MoM and 44% YoY.

Cumulatively, car sales for 5MFY20 declined by 45% YoY to 55,407 units owing to lackluster auto sales across all OEMs and bleak demand trend for LCVs and 4x4s.

OEM wise, PSMC and HCAR saw sales for the month dip to 5,846 units (down 16% MoM) and 1,304 units (down 6% MoM), respectively, during Nov’19 whereas INDU saw a rise of 6% MoM with Corolla leading the rebound with 2,172 units sold, an increase of 10% MoM owing to increased promotions. On a YoY basis, INDU and HCAR reported a decline of 52% and 62%, respectively. PSMC outperformed the industry with a 31% YoY decline despite 70% YoY drop in Wagon-R sales owing to launch of Alto.

Tractors sales remained under stress as sales for the month stood at 1,818, down 36% MoM and 52% YoY. Tractor sales have recorded a cumulative decline of 41% YoY in 5MFY20.

Trucks and buses sales were lower by 40% YoY whereas the segment reported a 28% rise on MoM basis with 383 units sold. On a cumulative basis, sales dipped by 51% YoY in 5MFY20 on the back slowdown in economic activity.

We maintain our neutral stance on the sector. We believe the current aggressive decline in automobile sales may taper off in 2HFY20. (Courtesy: BMA Capital Management Ltd.)

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