Karachi, June 14, 2022 (PPI-OT): Pakistan Autos: Sales remain buoyant in May’22

The total industry sales in May’22 clocked in at 28,283 vehicles (+39YoY/+2%MoM), consisting of 19,394 passenger cars (+50%YoY/+4%MoM), 3,497 LCVs (+27YoY/-11%MoM), and 426 trucks (+18%YoY/+2%MoM).

Total industry sales for 11MFY22 clocked in at 307,873 units (+42%YoY), consisting of 210,629 passenger vehicles (+51%YoY), 40,263 LCVs (+44%YoY) and 5,106 trucks (+53%YoY). The volumes have continued to show a strong growth in the current fiscal year, especially passenger vehicles whose numbers have exceeded the previous high of 201k units in 11MFY18. The effect of stimulus provided in FY22 budget has been a key factor, with demand piled up for the local OEMs.

Segment-wise, the 1,300cc+ premium segment emerged as the top performer, posting growth of 77%YoY followed by 800cc segment, growing 49%YoY and 1000cc segment witnessing growth of 7%YoY. On the flipside, volumes remained flat on a MoM basis in which the 800cc and 1,300cc+ segments grew by 5%MoM while the1,000cc segment contracted by 1%. In 11MFY22, the volumes of 800cc/1,000cc/1,300cc+ segments have depicted a growth of 68/54/38%YoY, clearly showing that low price vehicles have grown at a better rate than higher priced ones.

Amongst major OEMs, HCAR posted sales of 2,910 units, growing by 11% MoM. Furthermore, PSMC/INDU posted sales of 12,212/5,862 units -3%/+2%MoM. On YoY basis, INDU/PSMC/HCAR have posted growth of 26/47/45%YoY for May’22.

On the macro perspective, we believe that the flattish volumes depicted in May’22 indicate that the post FY22 budget euphoria is going to come to an end. Moreover, going forward demand is likely to take a hit, due to monetary tightening by the SBP and the additional taxes which will be imposed in FY23.