Report
Ali Asghar Poonawala
EUR 9.25 For Business Accounts Only

Pakistan Autos: CY19 end couldn't come sooner for OEMs, (AKD Daily, Jan 14, 2020)

Pakistan Autos: CY19 end couldn’t come sooner for OEMs

  • Dec’19 total industry sales of 12,415 vehicles (+21%MoM/-38%YoY), consisting of 9,987 passenger cars (+17%MoM/-38%YoY), 2,116 LCVs (+61%MoM/-36%YoY), and 251 trucks (-24%MoM/-17%YoY) wrapping up another year of drastic operational shifts and intermingled headwinds 
  • CY19 total industry sales of 191,085 units (-27.6%YoY) consist of 161,004 passenger vehicles (-25.6%YoY), 25,025 LCVs (-33.3%YoY), 4,294 trucks (-47.5%YoY) and 762 bus units (-22.2%YoY), marking the single largest decline since CY08, taking annual unit sales back five years to CY14-15 levels
  • PC sales were increasingly reliant on modest slippages in low-mid segment vehicle market (800CC/1000CC segments moves -12.3/-24.9%YoY) as opposed to drastic declines in the premium 1300CC+ segment (-34.3%YoY) taking segment-wise sales composition to 42.6/24.7/32.8% for 1300CC+/1000CC/800CC segments vs. 5YR average of 49.3/17.7/32.9%
  • Amongst major OEMs, PSMC/INDU/HCAR sold 109,858/46,943/28,102 vehicles during the period, receding -20.4/-28.4/-44.9%YoY, implying annual plant utilization (on stated double shift capacity) of 73/71/56% vs. 92/131/102% for CY18 as the industry dealt with a hampered demand outlook, specifically as consumers suffered from ‘sticker-shock’ over rabid price hikes
  • Lessons for CY20 remain the persistence of the ‘new model effect’, witnessed in CY19 segment-wise sales, likely to play out in the case of the Vios/Yaris for INDU. Moreover, improvements in purchasing power, either from monetary loosening or relative PkR stability, accompanied by tax concessions for consumers (removal of FED) could catalyze demand in the coming year.

AKD Research

Underlying
Pak Suzuki Motor Co. Ltd.

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.

Provider
AKD Securities Limited
AKD Securities Limited

AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.

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.

Analysts
Ali Asghar Poonawala

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