Report
Ali Asghar Poonawala
EUR 8.92 For Business Accounts Only

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.

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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