Topline believes Pakistan’s automobile sales fall due to a price spike and expensive auto financing in FY23.

Pakistan car sales (as reported by PAMA) clocked in at 6K units, up 10% MoM while down 79% YoY. Including Non-PAMA members, car sales clocked in at ~7K up 10% MoM. This takes FY23 car sales (as reported by PAMA) to 126,879 units, down 55% YoY. Including Non-PAMA members, car sales is expected to clock in at ~143K, down 56% YoY.

The non-availability of CKDs, escalating car prices, expensive auto financing, and low purchasing power of consumers are among the primary reasons for the decline in sales. Honda Atlas Car (HCAR) posted the highest increase of 253% MoM to 307 units in Jun-2023 due to (1) the low base of last month and (2) the availability of CKD parts. This takes full-year FY23 sales to 16,879 units, down 57% YoY due to the reasons mentioned above.

PSMC recorded growth of 2% MoM to 3,009 units in Jun-2023, led by an increase in sales of Bolan (+67% MoM), and Wagon-R (+11% MoM). PSMC’s Car sales recorded at 65,364 units down 57% YoY in FY23.

Indus Motors (INDU) recorded increase of 7% MoM to 1,846 units in Jun-2023 compared to 1,718 units in May-2023. This takes FY23 sales to 31,104 units down 58% YoY. Hyundai sales also up 11% MoM where Tuscon up 61% MoM to 313 units and Elantra up 28% MoM to 88 units in Jun-2023.

Amongst Tractors, Millat Tractors (MTL) recorded increase of 42% MoM to 2,136 units in Jun-2023 while Al Ghazi Tractors (AGTL) recorded sales of 854 units down 57% MoM. This takes total tractor industry sales to 30,942 units in FY23 down 48% YoY due to floods, plants shutdown, lower consumer buying power and higher prices.

Pakistan bike sales were down 15% MoM and 42% YoY in Jun-2023. Atlas Honda (ATLH) recorded sales of 75K units, down 14% MoM and 32% YoY.

Trucks & Buses sales were down 3% MoM and 75% YoY to 149 units in Jun-2023. This takes FY23 sales to 3,836 units down 41% YoY primarily due to drop in transportation activity and slow down in the overall economy.

Courtesy- Topline Securities

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