Below is the Brokerage house analysis.
Pakistan Autos: Sales sprint into the New Year
· PAMA conveyed Jan’21 total automobile industry sales of 23,087 units (+31%MoM/+59%YoY), the highest in last 21 months, restoring demand comfortably to Pre-COVID levels. The upturn was led by Passenger Car sales (14,543 units, +29%MoM/+44%YoY), LCV/Pickup sales picking up to 2,972 units (+10%MoM/+65%YoY), while Truck sales remained muted at 290 units (-0.3%MoM/-26%YoY).
· The automotive industry realized 7MFY21 cumulative sales of 126,714 vehicles (+28%YoY) encompassing 81,570 Passenger Cars (+18%YoY), 15,900 LCVs & Pickups (+56%YoY), 1,940 Trucks (-8%YoY), 360 Buses (-15%YoY) and 26,945 Tractors (+54%YoY), reversing the trend of cumulative declines experienced during Covid-19.
· Segment wise sales showcase major uptick in premium vehicle segment of 1,300CC+ (6,944 units in Jan’21 +44%MoM/+27%YoY), while the 800CC- segment sales rallied as well (4,813 units +36%MoM/+104%YoY), with 1000CC+ segment sales sustaining (2,786 units -2%MoM/+23%YoY) for the month, moving segment wise composition of 1300CC+/1000CC/800CC cars to 48%/19%/33% for Jan’21 as against 43%/25%/32% in the preceding month.
· Amongst major OEMs, PSMC/INDU/HCAR reported Jan’21 sales of 9,013/5,452/2,450 units ascending 19%/36%/39%MoM and 62%/36%/11%%YoY, taking the monthly PC+LCV sales to 17,515 units (+26%MoM/+47%YoY), demonstrating healthy recovery in demand of automobiles, where new model launches, concessionary loan schemes (particularly for PSMC), and improved farmer economics are likely to have played a strong role.
· We maintain our favorable stance on INDU with firm profitability in the backdrop of steady PKR dynamics, controlled inflation, low interest rates and ‘return-to-normal’ demand recovery post COVID-19, underpinned by the launch of vaccination drive at home. To note, the industry is now exhibiting signs of broad-based recovery, despite underreporting sales in absence of Kia numbers.
