According to the latest data released by Pakistan Automotive Manufacturers Association (PAMA), total passenger car and LCV sales for Dec’19 clocked-in at 12,103 units, recording an uptick of 23% MoM

Cumulatively, car sales for 1HFY20 declined by 44% YoY to 67,510 units owing to macro-economic factors including higher financing rates and lower economic activity.

OEM-wise, PSMC outperformed the industry, recording an uptick of 49% MoM to 8,732units during Dec’19. Key outperformance was witnessed in Wagon-R (+88% MoM), Bolan (+89% MoM) and Ravi (+202% MoM). INDU and HCAR, however, fell victim to the year-end phenomenon and recorded declines of 12% MoM and 23% MoM, respectively. INDU’s Corolla was able to insulate itself from December’s effect and recorded sales of 2,085units during Dec’19, down by just 4% MoM

Tractors sales remained under stress as sales for the month stood at 1,145units, down 37% MoM. Tractor sales have recorded a cumulative decline of 38% YoY in 1HFY20.

Trucks and buses sales were lower by 34% YoY and 19% MoM with the segment reporting sales of 312 units during Dec’19. On a cumulative basis, sales dipped by 48% YoY in 1HFY20 on the back of 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.( BMA Capital Management Ltd.)