Pakistan Autos_Budgetary measures to brush up auto industry, (AKD Daily, Jun 15, 2021)
AKD Daily
Pakistan Autos: Budgetary measures to brush up auto industry
- Total automotive industry sales in May’21 clocked in at 20,302 units, recording a decline of 8% MoM which we believe is due to supply side constraints. Cumulative 11MFY21 sales amount to 217,217 vehicles registering a rise of 62%YoY, exceeding the Pre-COVID Levels.
- In terms of displacement wise sales for the month, the sales of 1300CC+ segment declined to 5,484 units (-20%MoM) due to slowdown in production amidst supply chain disruptions, while the 800CC & below segment sales of 4,139 units were also down (-14% MoM) in anticipation of prices to decline for small cars in FY22. Meanwhile, the 1000CC segment sales propelled by 20% MoM/+153%YoY to 3,311 units.
- The FY22 budget slashed the GST from 17% to 12.5% and removed the 2.5% FED on cars up to 850CC. In addition to this, GST on hybrid electric vehicles has been slashed to 8.5% for up to 1800CC and 12.75% for up to 2500CC. The GST on sale of local Electric Vehicles (EVs) is applicable at 1% while the import of CKD kits of EVs are exempted from GST.
- Our top picks for the sector include PSMC on account of anticipated volumetric growth of Alto. In addition to this, we like INDU due to extensive dealership network, prompt upgrades/facelifts and little competition from imported vehicles.
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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