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Pakistan Autos: January jump, but just for premium variants, (AKD Daily, Feb 12, 2020)

Pakistan Autos: January jump, but just for premium variants

• Following a clipped 4QCY19, a soft start to CY20 is seen with Jan’20 total industry sales of 12,338 units (-1%MoM/-47%YoY) consisting of 10,095 passenger cars (PC) (+1%MoM/-48%YoY), 1,806 LCVs & Pickups (-15%MoM/-43%YoY) and 386 Trucks (+54%MoM/-28%YoY), marking the tenth consecutive month of YoY sales decline

 

• Cumulative 7MFY20 total industry sales of 81,912 vehicles (-44%YoY) constituted by 69,192 passenger cars (-44%YoY), 10,219 LCVs & Pickups (-48%YoY) and 2,077 Trucks (-45%MoM), underpin a broad-based constrained demand scenario where Passenger Cars/LCVs/Trucks constitute 84/12/3% of 7MFY20 sales vs. 5yr historical average of 82/14/3%, with cumulative sales now near levels seen during FY15

 

• In terms of segment wise Passenger Car 7MFY20 cumulative sales, 1300+/1000CC/800 & below segment moved -59.2/-58.2/+4.2%YoY with premium segment sales faring worse than the industry (seven consecutive months of YoY sales declines) as the absence of new models, new categories introduced by entrants (crossover segment by Lucky Kia) and consistent price hikes break marginal consumer propensity 

 

• Amongst major OEMs, 7MFY20 cumulative sales for PSMC/INDU/HCAR amount to 50,253/18,197/10,356 units shifting -33/-53/-64%YoY, taking market shares over the period to 64/23/13% vs. 5yr average of 58/26/16% underpinning a significant shift to mid-segment heavy PSMC in a tough consumer durable demand environment
• We retain our liking for INDU, where industry-wide parallels can be made with the FY08-09 down cycle (circled in FY YoY chart below). In that case, the consecutive YoY decline was seen for 14 months. Additionally, the MoM climb in Jan’20 sales for the OEM can be chalked up to targeted discounting, countering some of the expected slide in sales before the launch of the Yaris.

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