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Pakistan Automobiles: Auto Sales down 8% YoY in FY19 after 6 years

• After six years, Pakistan auto sales witnessed decline of 8% YoY in FY19 due to multiple factors mainly 1) restriction on non tax filers to purchase new car, 2) significant hike in auto prices due to rupee devaluation and 3) economic slowdown.
• Additionally, increase in policy rate has also weighed on auto financing growth which remained restricted to +11% during 11MFY19 compared to last five years (FY14-18) CAGR of 24%.
• The major contributor to industry decline is HCAR, down 14% YoY, followed by PSMC down 11% YoY. However, INDU remained exceptional with growth of 4% YoY.
• Indus Motors (INDU) reported YoY growth of  4% in FY19,  where Corolla came to rescue the company as it was the only variant which recorded growth of 10% YoY, Fortuner and Hilux sales declined by 38% YoY and 19% YoY respectively.
• Pak Suzuki (PSMC) reported 11% YoY decline in FY19. The decline in sales was led by Mehran which is  down 31% YoY as its production was ceased in Mar 2019 & it has been replaced by new variant Alto 660 cc. Bolan & Ravi variants are down 19% & 15% YoY respectively. Two models of PSMC (Wagon-R and Cultus) outperformed industry by recording growth of 12% & 11% YoY respectively.
• After seven years, Honda Cars (HCAR) sales fell 14% YoY during FY19, highest decline among its peers. Sale of City & Civic fell by 8% YoY. BR-V sales were down significantly by 42% YoY.
• After a decade, Atlas Honda (ATLH) witness decline of 3% YoY in bike sales to 1.1mn units.
• During Jun 2019, auto sales witnessed decline of 18% YoY, where volumes of INDU, PSMC and HCAR fell by 20%, 13% and 31% YoY respectively.