Pakistan Autos: Consumers put the brakes on demand, (AKD Daily, Aug 20, 2019)
- July’19 total automotive industry sales of 13,119 units (-19%MoM/-41%YoY) amounts to the weakest monthly sales figure since Dec’14, leading 7MCY19 total industry offtake to close at 134,630 units (-17%YoY), where major constituents moved -15%/-23%/-46% for Passenger Cars/LCV & Pick-ups/Trucks for the cumulative period
- Sector wide declines can be seen crossing the double digits, where July’19 sales for every segment fell between 42%YoY (for PC segment) and 30%YoY (for Trucks), depicting a strenuous demand picture, hindered by rising price tags and inflationary pressures burdening demand while soft consumer confidence indicates a holding back of discretionary consumer durable spending.
- For the passenger car segment during July’19 the commencement of sales for the 660CC Alto failed to counter general industry decline (10,968 units sold -16%MoM/-42%YoY), while during 7MCY19 800CC & below/1000CC/1300cc plus segment slipped -25/+0.4/-15%YoY.
- Amongst major OEMs, INDU and HCAR witnessed sales peak-out with July’19 offtake declining 56/66%YoY, while PSMC fared relatively better (decline of 23%YoY) on the back of a strong PC franchise. Over 7MCY19, PSMC/INDU/HCAR sales offtake receded -14/-8/-32%YoY.
- The only catalyst on the horizon seems to emerge from new model launches, where INDU is on track to launch the Vios to replace the 1,300CC Corolla. Planning to accommodate any pickup in demand, the OEM is slated to complete its expansion during a similar timeframe, providing significant runway for bottom-line growth.
AKD Research
Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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