Auto numbers: against all odds

The demand frenzy seen in passenger car segment during much of 1HFY12 shows no signs of letting up just yet. Contrary to general expectations car sales remained resilient despite rising prices. Latest data released by Pakistan Automotive Manufacturers Association (PAMA) exhibited 17 percent growth in the total passenger car sales in 8MFY12 compared to the same period in the last fiscal year. On year-on-year basis, the growth rate in February stood at 12 percent. Analysts are attributing growth to remittances and purchases made under the Yellow Cab Scheme initiated by the Punjab Government. In addition the January or New-Year effect also kicked in. Categorywise the largest increase was seen in the "1,000cc category", which grew by 35 percent in 8MFY12. Leading this category was Suzuki Cultus which managed to beat its previous years sales by 38 percent in the period under consideration. Closely following this segment was the "below 1,000cc category" with a growth rate of 29 percent. The picture for the luxury car segment is still not very pleasing, primarily since manufacturing activities in Honda Pakistan remained suspended throughout the last three months. On the flip side, this segment has seen some big successes this year, in the form of Suzuki Swift which has grown by 86 percent in 8MFY12 compared to same period of last year. Companywise Pak Suzuki led the pack in terms of growth, as the Company experienced a spike of 35 percent in demand in 8MFY12 over the same period of last year, largely thanks to the Yellow Cab Scheme. Following it, still far behind was Indus Motor Company with a growth of 4 percent. Honda, on the other hand, saw a slowdown of 33 percent in 8MFY12. The resilience of car makers despite inflation, currency devaluation and relaxed import policies is surely something to cheer. However, if the government accepts the proposal put forth by the association of used car importers, to allow import of cars (above 1,800cc) that are up to 10-year old, local manufactures could receive a huge blow.

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AUTO NUMBERS
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                 8MFY12     8MFY11     chg
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Indus motors     34,366     32,991      4%
Pak Suzuki       70,162     52,067     35%
Honda Car         7,024     10,444    -33%
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Source: PAMA
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