PAMA has recently released the sales figure for the month of Jul-18, wherein total auto sales (excluding motorbikes) has surged by 11% MoM (4% YoY) to 26K units. During the month, sales of Buses, Cars, Pick-up augmented by 47%, 21%, and 6%MoM, while Jeeps, Trucks, Motorbikes and Tractors sales decreased by 46%, 29%, 5% and 1% MoM respectively.
Moreover, sales of Orient, HCAR, MTL, INDU, and PSMC increased by 63%, 37%, 27%, 20%, and 5% MoM, while AGTL, GHNI, HINO and Masters sales fell by 46% 30% 19% and 9 %. Despite the fillers and non-filers taxation issue, the local car sales posted an attractive growth. The major reason could be the rising demand of vehicles for the election campaign, moreover, difficulties on the import of used cars also limited the choice of buyers towards local assembling cars. Delivery of pending orders before time could also be another reason for rising car sales during the said month.
Going forward, Spectrum Securities Limited expects, auto sales would decrease in the near future as vehicles are only available to tax filer. Moreover, INDU has dealt with its bottlenecking which would increase its sales along with the market share. However, recent rupee devaluation and tough competition (new entrants) would maintain pressure on profit margins of companies. Furthermore, August will set a direction for the auto industry, as PSMC is expecting 10,000 units from Aug-18 to Dec-18.