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Pakistan AutomobilesPakistan Automobiles: Jan 2019 Auto Sales Down 4% YoY

• Pakistan Auto sales are down by 4% YoY in Jan 2019, as against 1% YoY increase in Dec 2018. However, sales are up 16% MoM primarily due to seasonal factors. Furthermore, anticipated price hike due to 5% devaluation in PKR during Nov and Dec 2018 may have also incentivized purchase of cars, we believe. This brings 7MFY19 sales number to 143K units, down by 3% YoY. Despite supportive measures by the govt in recent economic reform package (Jan-19), we continue to expect slow down in auto sales given deteriorating economy as well as multiple price hikes in the past 14 months.
• Indus Motors (INDU) continued to report YoY growth (up 16% YoY in Jan 2019) due to a strong order book led by sales of Corolla variants, up by 26% YoY. However, sales in Fortuner and Hilux variants have declined by 45% YoY and 5% YoY, respectively. On a monthly basis, total volumetric sales are up 17% while sales are up 9% YoY for 7MFY19.
• Honda cars (HCAR) grew its sales by 3% YoY due increase in civic and city sales volumes by 4% YoY. BR-V continued its declining sales trend with a fall of 2% YoY. On a monthly basis, total volumetric sales are up 91% due to low base effect (Dec 2019 sales at 2,367 units, lowest monthly sales since Jan 2016) along with expected price hike, while sales are down 1% YoY for 7MFY19.
• Pak Suzuki (PSMC) continued to report YoY decline in sales, down by 15% YoY in Jan 2019 after some respite in Dec 2018. To note, PSMC sales volumes have fallen YoY in every month since Aug 2018 except for Dec 2018. Sales decline was led by Mehran, Bolan, Swift and Ravi variants down by 37% YoY, 27% YoY, 28% YoY and 11% YoY, respectively. However, Cultus and Wagon-R sales rose by 7% YoY and 15% YoY, respectively. On a monthly basis, volumetric sales are flat while sales are down by 10% YoY for 7MFY19.