AUTO SALES (JULY 2006 - FEBRUARY 2007)

MARIAM NASIR
Mar 19 - 25, 2007

Pakistan Automotive Manufacturers Association released following data of auto sales and production for the eight-month (July 2006-February 2007) period.

Car sales and production rose by 6.8% and 4.2% to 101,644 units and 100,780 units, respectively, in the eight-month period. Production and sale of tractors during the period was up by 6.8% and 7.5% to 34,482 units and 34,038 units, respectively. Production and sale of LCV's was up by 13.4% and 16% to 22,492 units and 22,509 units, respectively. Sales performance of trucks was slightly below par as they rose by 1% to 2,820 units. Motorcycles sales were down by 10.6% to 301,826 units and that of buses were down by 3.6% to 555 units. Surge in car sales can be attributed to the completion of capacity enhancement plans by the assemblers, especially by Indus Motors and Pak Suzuki while the volumetric growth of tractors was because of the end of Rabi season where the harvesting takes place and farmers book profits hence enabling them to buy the vehicles.

SEGMENT (UNITS)

(JULY - FEB) FY06

(JULY - FEB) FY07

CHANGE IN %

.

PROD

SALES

PROD

SALES

PROD

SALES

Cars + LCV's

116,503

114,558

123,272

124,173

5.8%

8.4%

Trucks

2,831

2,791

2,860

2,820

1.0%

1.0%

Tractors

32,293

31,671

34,482

34,038

6.8%

7.5%

Bus

439

576

565

555

28.7%

-3.6%

Motorcycles

339,329

337,670

301,872

301,826

-11.0%

-10.6%

SMALL CAR SALES RISING

Among different engine capacity cars, 800cc car, recorded sales growth of 13% in the eight-month period to 31,059 units; 1000cc cars remained more popular, recording sales growth of 23% to 32,182 units while sale of cars above 1300cc declined by 8% to 38,423 units. Many of the factors contributed in the better performance of the small car segment like rising fuel prices leading consumers to switch to fuel-economic cars, high financing cost on higher engine capacity cars and first time buyers and customers upgrading from motorcycles.

PERFORMANCE OF THE PLAYERS

Among the manufacturers, Pak Suzuki continued to dominate the industry by selling 72,794 units, recording sales growth of 28% y-o-y during the eight months, followed by Indus Motor which sold 30,824 units up 20% y-o-y. The major contributors in the sales of Pak Suzuki and Indus Motors were the low engine capacity cars. Mehran, Cultus and Alto sales were up by 3%, 33% and 45% to 22,953 units, 16,387 units and 13,415 units, respectively. Indus Motors Cuore's sales performance was outstanding, rising by 59% to 8,106 units. However, the other two assemblers - Honda Atlas and Dewan Farooque Motors - continued to show sluggish performance. Sale of Honda Atlas during the eight-month period was down by 41% to 11,635 units while that of Dewan Motors was down by 30% to 7,194 units.

NEW PLAYERS

The industry is about to experience greater competition particularly in the mid-size cars segment in the coming days. Government's favorable policies have started to attract eyes of many manufacturers, including Renault and Nissan Motors. Renault is reportedly in negotiations with the government to start assembly operations in Pakistan and has signed MoU with Ghandhara Nissan. According to a segment of press, the company is planning to launch its Logan model, a car specifically designed for developing economies having lower purchasing power. Ghandhara Nissan Ltd. is also planning to re-introduce locally assembled Nissan Sunny in 1,300-1,600 engine capacity by Jan 08, after a gap of nearly 4 years. The car will be priced lower than its imported variants.