Morning Call Auto Data – Arif Habib Limited

Karachi, June 13, 2012 (PPI-OT): 11MFY12 auto sales register 15% YoY growth

As per the latest available data, recently released by the Pakistan Automotive Manufacturers Association (PAMA), car and LCV sales witnessed a 15.1% YoY growth in 11MFY12.

According to Arif Habib Limited, segment-wise break-up reveals that the economy segment (less than 1,000cc) led the growth with sales increasing by 24.9% YoY during the period under review. This was followed by the 1,000-1,300cc segment, which witnessed sales growth of 19.2% YoY to 26,734 units. The high-end segment (1300cc+) meanwhile remained the sector’s laggard and sales grew by a meager 2.1% YoY to 58,458 units. This lackluster performance can mainly be attributed to the suspension of production at Honda Atlas Car’s (HCAR) plant from Dec-11 to Mar-12, and single-digit sales growth of Corolla. Sales of LCV’s and 4×4’s registered a healthy 27.4% YoY growth in 11MFY12, mainly due to a jump in Bolan (PSMC), Ravi (PSMC) and Hilux (INDU) sales.

Auto data May-12 Apr-12 MoM May-11 YoY 11MFY12 11MFY11 YoY
1300cc and above 6,151 5,919 3.9% 4,888 25.8% 58,458 57,251 2.1%
1000cc 2,592 1,726 50.2% 2,320 11.7% 26,734 22,434 19.2%
1000cc 6,191 5,715 8.3% 2,914 112.5% 36,036 28,846 24.9%
Total cars 12,431 11,224 10.8% 10,120 22.8% 121,228 108,531 11.7%
LCV’s + 4×4 4,179 3,574 16.9% 3,034 37.7% 38,717 30,391 27.4%
Total 16,610 14,798 12.2% 13,154 26.3% 159,945 138,922 15.1%


Company wise May-12 Apr-12 MoM May-11 YoY 11MFY12 11MFY11 YoY
PSMC 10,608 8,837 20% 7,920 34% 100,805 77,123 31%
INDU 4,846 5,203 -7% 4,205 15% 48,907 46,145 6%
HCAR 1,150 752 53% 944 22% 9,901 14,698 -33%
Source: PAMA

PSMC: Demand on song

Pakistan Suzuki Motor Company Limited (PSMC) witnessed a 31% YoY improvement in sales in 11MFY12 to 100,805 units. PSMC has benefitted from the Punjab Government’s Yellow Cab Scheme, which has resulted in sales of Mehran and Bolan to increase by 39% YoY and 54% YoY respectively. Sales of Swift, Cultus and Alto meanwhile, increased by 67% YoY, 23% YoY and 15% YoY respectively in 11MFY12. Total units sold by the company in May-12, increased by 20% MoM to 10,608 units. On a YoY basis, this figure is 34% higher than May-11’s sales of 7,920 units.

INDU: Company witnesses negative sales growth in May-12

Sales of Indus Motor Company Limited (INDU) decreased by 7% MoM in May-12 to 4,846 units. The primary reason behind this decline is the discontinuation of Coure, with only 63 units being sold during the month. During 11MFY12, the company sold a total of 48,907 units, which is 6% higher on a YoY basis. Hilux has remained at the forefront (with respect to sales growth), and its sales are higher by 56% YoY to 3,625 units in 11MFY12. Sales of Corolla during 11MFY12 increased by 9% YoY to 41,720 units.

HCAR: Resumption of operations lead to impressive growth

Honda Atlas Cars Pakistan Limited (HCAR) reported a 53% MoM increase in total units sold to 1,150 units. The company’s endeavors to clear the backlog of orders of its City model resulted in sales of the model to jump by 533% MoM to 1,050 units. In 11MFY12 however, the company was only able to sell 9,901 units (33% lower YoY) owing suspension of production due to floods affecting its primary parts supplier in Thailand last year.

Tractors: Al-Ghazi Tractors lead sector’s sales growth

Al-Ghazi Tractors Limited (AGTL) registered a healthy 20% MoM sales growth to 2,743 units in May-12, helping the segment attain an overall performance improvement of 10% MoM to 6,913 units. On a YoY basis however, the sector recorded 33% lower sales owing to the imposition of GST last year, which resulted in demand for the product drying and production being suspended as a consequence. Millat Tractors Limited meanwhile, reported a 4% MoM improvement in sales to 4,170 units. On a YoY basis, sales of AGTL and MTL declined by 42% and 28% respectively during 11MFY12. This was mainly on account of the suspension of production mentioned above.

Budget FY13 provides some insight into possible regulatory changes

The government is considering abolishing regulatory duty and scaling down Customs duty to 25% on various luxury goods, which include new and used cars and their components. While Depreciation allowance of 1% per month on import of CBUs is expected to remain unchanged, despite a proposal of 2% per month by the car importers. Although the final word in this regard is going to be contained in the upcoming Auto Industry Development Plan (AIDP-II), Arif Habib Limited  believes that those guidelines are going to be more or less in line with the announcements in Budget FY13.

PSMC is Arif Habib Limited’s top pick

Trading at a discount of 24%to Arif Habib Limited’s Dec-12 target Price of PKR 110.0/share, Arif Habib Limited’s top pick in the sector is PSMC.

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