Auto sales plunged by 38% YoY | 8% MoM to 17K units during Dec’22, mainly on the back of import restrictions amid SBP reserve depletion. The restriction on import has led to lower inventory levels held by auto parts manufacturers and auto assemblers, leading to unplanned non-production days. We witnessed a shutdown at INDU’s plant for 11 continuous days in during Dec’22. Likewise, MTL announced closing its plant every Friday from mid-December for an indefinite time, due to subdued demand for tractors, before complete shutting down in Jan’23. Although towards the end of Dec’22, the government announced easing the import restriction on essential items including CKD units; we believe other essential items will be prioritized until exchange reserves get stable.

1,300cc segment and above showed a decline in sales of 23% MoM given the sales of Civic and City went down by 35% MoM. In addition, the sales of Corolla and Yaris portrayed a decline of 3% MoM.

Alternatively, we witnessed a jump in 1,000cc segment sales by 4% MoM, led by a rise in Wagon R sales whose sales went up by 22% MoM to 872 units. We believe this segment has offered better affordability in recent times.

Sales in the below 1000cc segment went down by 5% MoM. This decline was contributed by Alto and Bolan, whose offtake declined by 5% MoM and 8% MoM to 6,898 units and 464 units, respectively.

INDU: INDU sales went down by 13% MoM, as Fortuner and IMV sales decreased by 28% MoM to 1,309 units.

PSMC: PSMC sales depicted a decrease of 8% MoM as swift sales declined (by 36% MoM).

HCAR: HCAR sales were up by 5% MoM, as the launch of HRV grabbed the attention of car enthusiasts, taking the cumulative sales of HRV and BRV to 1,098 units (up by 137% MoM).

Tractors: During Dec’22, Tractor sales went down by 18% MoM, majorly contributed by MTL, whose sales tumbled by 65% MoM. In addition, AGTL sales climbed up by a noteworthy 275% MoM.

Courtesy- AHL Research