KARACHI: Pakistan Automotive Manufacturers Association (PAMA) released monthly Automobile sales data for May 2019 wherein total automobile sales for the month declined 21% YoY to 24.1k vehicles while on a MoM basis, total automobile sales remained stagnant in May.

Passenger car sales for May 2019 arrived at 15.4k units, registering decline of 15% YoY and 10% MoM. Moreover, SUV sales during the month arrived at 600 units (-41%YoY) versus 1,010 units sold in May 2018, while truck sales registered notable fall of 54% YoY and 10% MoM. Bus sales recorded 19% YoY decline whereas as compared to April 2019, sales improved 28% MoM.

“Decelerating economic growth, rising automobile prices & hefty increment in interest rates (leading to adverse impact on auto financing) can be attributed to the notable decline in May 2019 sales,” Muhammad Ahmed at Pearl Securities said.

On a cumulative basis, automobile sales declined 11% YoY to 267.2k units during 11MFY19 July-May 2018-19). With regards to segmental breakdown, Passenger car sales declined 4% YoY. Apart from improvement in bus sales (+25%YoY), SUVs, trucks & pickups registered decline of 40% YoY, 35% YoY and 15% YoY, respectively during the period.

Passenger car sales arrived at 15.4k units in May 2019 as compared to 18.2k units sold during the same month last year, exhibiting a fall of 15% YoY. Sales of “800cc & below 1000cc” & “1300cc & above” depicted 42%YoY and 20%YoY decline, respectively while sales of “1000 cc” recorded 29% YoY increase.

Moreover, as compared to May 2018, Pak Suzuki Motor company (PSMC) recorded 3pps improvement in market share to 57% whereas Indus Motor Company (INDU) recorded 5pps increase in market share to 27% while market share for Honda Cars (HCAR) declined 3pps to 16% during the month.

Total sales of Pak Suzuki Motor company (PSMC) for the month of May 2019 clocked in at 10.1k units, exhibiting a decline of 13% YoY with Mehran leading the decline in sales volume recording 50% YoY lower volume during May 2019. Moreover, Swift, Bolan & Ravi recorded 3% YoY, 25% YoY & 31% YoY decline respectively, while Cultus & Wagon R managed to record growth of 80%YoY and 2%YoY respectively during the month.[the_ad id=”31605″]Indus motors witnessed 20% YoY decline in its car sales (4.7k units) during May 2019. Hilux & Fortuner sales registered steep falls of 36% YoY and 58% YoY respectively, whereas Corolla sales declined 13% YoY.

Honda Car’s passenger car sales (Civic & City) clocked in at 2.6k units in May 2019 as compared to 3.8k units sold in May 2018, registering 32% YoY decline. Moreover, BR-V sales arrived 23% YoY lower with 388 units sold in May 2019.

Truck & bus sales for May 2019 arrived 50% YoY lower at 451 units with sales of HINO, Master and ISUZU registering decline of 61% YoY, 32% YoY & 50% YoY, respectively during the month.

Tractor sales declined 46% YoY as FIAT (-50%YoY) & Massey Ferguson (-44%YoY) continued to record significantly lower volumes during the month owing to rising input costs for farmers contributing to impaired tractor sales volumes.

“Going forward, we expect strong headwinds for the industry owing to challenging economic environment ahead. Diminishing GDP growth (projected at 2.4% for 2019-20 as per Federal Budget 2019-20) & declining purchasing power would continue to put brakes on automobile demand.

“Moreover, as per budgetary proposal the scope of FED imposition on cars has been expanded, to introduce 2.5% FED on cars up to 1,000cc engine displacement, 5% FED on 1,001 to 2,000cc engine displacement cars and 7.5% FED on 2,001cc & above engine displacement cars. The proposal is likely to contribute towards rise in automobile prices in the near term. Additionally, PKR devaluation and rising interest rates (also leading to adverse impact on auto financing) would further exacerbate pressure on industry profitability,” Pearl Securities analyst noted.