Pakistan Auto_Monthly sales build immunity in five months, (AKD Daily, Aug 12, 2020)
AKD Daily
Pakistan Auto: Monthly sales build immunity in five months
- July’20 total automotive industry sales of 11,836 units (+32%MoM/-10%YoY) signals a reversion to pre-COVID normalcy, completing a “V-shaped” recovery over five months while extending consecutive YoY downtrend to its 21st month (back to levels seen during 2009). Consequently, the rocky 7MCY20 total industry offtake stood at 57,509 units (-57%YoY), where major constituents moved -58%/-55%YoY for Passenger Cars/LCVs.
- Recent comparisons reveal a double digit bounce back, with PC/LCV sales up 38/7%MoM, while within PC segments, 1,300CC+ witnessed improved sales, conforming to our expectations. Resumption of business activity, teetering healthcare externalities and concessionary borrowing rates have effectively immunized automobile sales.
- Yaris sales (1,883 units for July’20) supported growth in the 1,300CC+ segment (+43%MoM/+61%YoY) assisting INDU in taking sales back past the 4K level. Overall for 7MCY20, amongst segments 800CC>/1,000CC/1,300CC+ sales dipped -59/-68/-55%YoY, and for PSMC/INDU/HCAR sales slipped -65/-48/-51%YoY.
- As sectoral catalysts push demand back to a stability, INDU’s operational strengths are abundant in driving profitability higher, in our view. On a closing note, we note the absence of CKD sales by new entrants, meaning PAMA data underreports actual domestic industry sales hampering industry analysis (as they grow in prominence) where eagerly await their membership in PAMA.
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