PAMA reported auto sales of 13,108 units in October, tripled YoY and up 27% MoM, where the former is due to the absence of import restrictions, while the latter signals an encouraging recovery in economic activity. A significant portion of the recovery is derived from Suzuki sales (up 46% MoM), which caters to the middle class. This brings total sales for 4MFY25 to 40,693 units, a 50% YoY increase.
§ INDU: Toyota’s sales rose 7% MoM (up 2.4x YoY), underperforming the industry, where the main laggard was the Fortuner & Hilux segment, which contracted by 11% MoM. Even the ‘Sedan & SUV’ segment showed lacklustre growth of only 12% MoM. Consequently, market share fell by 4ppt to 19%.
§ HCAR: Honda outperformed its peers, with its sales up 19% MoM. The main contributor to sales remains the sedan segment, while the SUV segment continues to be weak (greater competition in the SUV space). Strong sedan segment growth allowed HCAR to maintain its market share of 12%.
§ SAZEW: The firm continues to move from strength to strength, with four-wheel sales improving 21% MoM and a significant c.4x jump YoY, totaling 1002 units. Its market share in the four-wheel segment was steady at c.8%.
§ Tractor industry: Cumulative tractor sales showed a recovery, rising 61% MoM to 1,733 units, solely due to MTL (up 94% MoM), while AGTL saw a 12% contraction. Consequently, MTL improved its market share to 83%, while its peer’s dropped 14ppt to 17%.
Similar to the sales in September, October auto numbers remain encouraging as the lower end of the market (Suzuki 4-wheelers and 2/3-wheelers) has started to recover. This momentum is expected to strengthen in the coming months, driven by declining interest rates and increased auto financing. Several auto manufacturers have also announced new models recently, which should further stimulate demand. Our top pick is INDU, supported by a robust balance sheet and high margins on the Hybrid Corolla Cross.
