Significant decline in Car Sales as Economy weakens, Honda Hardest hit

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Significant decline in Car Sales as Economy weakens, Honda Hardest hit

Total Auto Sales of Pakistani Auto Manufacturers declined by 11% to 16,288 units in June-19 as compared to 18,342 units in May-19. For the full-year period between July’18 to June’19 (FY19) Total Auto Sales declined by 9% to 245,724 units.

Summer Blues for Pak Suzuki

Pak Suzuki Motor Company (PSMC) was the main loser where Sales declined to 7,879 units in June-19 as compared to 10,080 units in May-19 marking lowest sales since 2015. A wider 67%YoY decline was witnessed in Mehran sales which was discontinued earlier, while Cultus saw a 27% decline on monthly basis.

On a Full Year Basis, Total Unit Sales of Pak Suzuki declined by 10% to 128,317 units in FY19 as compared to 144,070 units in FY18.

New Models offered (Cultus, Wagon R) clearly dominated the composition of cumulative sales In FY19 as sales grow by average 12% for Wagon R and Cultus this year.

A Slowdown in sales of Bolan and Ravi was witnessed as offtake declined by 19% and15%YoY respectively.  This present a bearish outlook for PSMC in Light Commercial Vehicle category where low price competition from Chinese entrants and expected entry by Korean Companies pose further threats.

Corolla shines for Indus Motors

Corolla Sales continue upward momentum capitalizing on its brand value. Toyota Corolla marked sales of 56,720 units in FY19, a 10% yearly growth in stark contrast to bearish sentiment of overall Auto Industry. Total FY19 Sales for Indus Motors increased to 65,399 units marking a 3.7% net yearly increase.

Sales for 4×4 Hilux declined by 19% to a total of 6070 units in the Fiscal Year 2018-19.

Hard hit for Honda Sales

Honda Civic and City sales declined significantly, with June-19 offtake of 2,106 units marking a 28% decline over June-18 sales. Total Sales for Civic and City during July’2018 to June’2019 period stood at 39,189 units marking 8% yearly decline. These are the lowest numbers since 2013 leading us to believe declining interest in Honda Civic brand as the latest model has exceeded three years period since its launch.  Moreover, a little face-lift of the Civic from April-19 onwards seems to have little impact to garner Interest. Honda Atlas Car need to launch new models in order to revive Sales.

Isuzu D-Max fail to gain attention

Isuzu D-Max 4×4 new model which was launched in February this year, failed to gain Sales momentum. A total 57 units were sold in June-19 as compared to 187 units in its launching month. A total of 400 units were sold in whole year, painting weak response to the 4×4 vehicle.

Auto Sector Outlook

We at The Mint PK have a bearish outlook on the sector as multiple economic challenges along with new competition entring the market will impact existing Car Manufacturer’s sales.

The recent price increase to transfer the impact of FED and Rupee depreciation in the short run will have a further adverse impact on Auto Sales going onward.

Furthermore, Slow down in GDP Growth coupled with rising Car financing rates and anticipated arrival of cheap Chinese brands will further slow down sales of Existing Auto Manufacturers.

Data Source: PAMA

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