Pakistan Automotive Manufacturers Association (PAMA) released latest production and sales data for the month of Feb’20 depicting a slight increase of 2% MoM in total passenger car and LCV sales with 12,119 units sold as compared to 11,894 units sold last month. However, on a YoY basis, auto sales remained 39% lower compared to same period last year.

Cumulatively, car sales for 8MFY20 decreased by 44% YoY to 91,510 vehicles as demand waned aggressively for sedans, hatchbacks as well as 4x4s and LCVs while phase out of Mehran and cannibalization of WagonR by recently launched Alto aggravated the decline.

OEM wise, PSMC and HCAR saw sales for the month decline to 5,377 units (down 3% MoM) and 2,141 units (down 3% MoM), respectively, for the month of Feb’20 while INDU noted a rise of 12% MoM as sales promotion helped register higher sales across each variant. On a YoY basis, PSMC and HCAR reported a decline of 50% and 35%, respectively, whereas INDU managed to report a lower drop of just 18% compared to overall industry decline of 39% for the month.

Tractor sales have remained dismal during the month with 3,141 tractors sold, a drop of 45/22% MoM/YoY translating to a cumulative decline of 36% YoY in 8MFY20 as economic activity dwindled.

The aggressive decline may continue for PSMC and HCAR for the rest of 2HFY20 while INDU may exhibit a trend contrary to the industry, we believe. Planned launch of Yaris expected by end of Mar’20 may help deliver a volumetric uptick for INDU in our opinion. (BMA Capital Management Ltd.)