As per the latest data released by Pakistan Automotive Manufacturers Association (PAMA), total passenger car and LCV sales for Oct’19 clocked-in at 10,932 units recording a decline of 8% MoM and 56% YoY. The decline in auto sales remain much higher than anticipated.

Cumulatively, car sales for 4MFY20 decreased by 45% YoY to 45,567 due to continued lackluster auto sales across all OEMs and weak demand trend for LCVs and 4x4s.

INDU and HCAR saw sales for the month dip to 2,496 (down 61% YoY) and 1,384 units (down 72% YoY), respectively, during Oct’19 while PSMC saw a dip of 48% YoY where launch of Alto has helped the company mitigate wider decline across all variants. On a MoM basis, PSMC and HCAR reported a decline of 15% and 4%, respectively. INDU managed to report an 18% MoM rise owing to increased promotions.

Tractors sales remained under stress as sales for the month stood at 2,861, down 24% MoM and 55% YoY. Tractor sales have recorded a cumulative decline of 39% YoY in 4MFY20.

Trucks and buses sales were lower by 55% YoY while on sequential basis, 299 units were sold for the month, up by 13% MoM. On a cumulative basis, sales dipped by 53% YoY in 4MFY20 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) .