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For those predicting massive boom in the auto industry and for whom numbers are not corroborating the right sentiments, calm down. Maybe not in cars as much, but growth is visible in the surge in commercial vehicles sales as well as tractors. Together they are saving the day for what some could call a tepid fiscal year.

The locally assembled production and sales numbers announced by Pakistan Automotive Manufacturers Association (PAMA) on their website show an overall growth of 8 percent in the sales of passenger cars, jeeps, LCVs and tractors in 11MFY17, year on year. Cars and jeeps grew by 4 percent, and commercial vehicles plus tractors by 16 percent, with tractors growing by a phenomenal 65 percent. (Read yesterday’s story: “Tractors’ phenomenal comeback)

Pakistan Suzuki Motor Company (PSX: PSMC) has been in the news ever since the latest Cultus arrived at a much steeper price. But the company has better performing cars in its fleet despite the Cutlus hype in the market. Cultus sales grew by 3 percent while WagonR continues to outperform selling an average of 1500 cars over the past 11 months (Cultus: 1100). The year on year drop in overall sales for PSMC comes because Punjab government’s Rozgar Scheme had facilitated 50,000 sales of Bolan and Ravi last year. That scheme is now coming back as the Orange Cab scheme with likely 50,000 additional sales of Mehran, Bolan and Wagon R variants. (Read our detailed story on the scheme: “Orange Optics”)

The company has also introduced imported variants—compact Ciaz and SUV Vitara to gauge market appetite. Meanwhile, Alto 660 is still on the cards. So despite temporarily shelving its investment plans of $460 million in a new plant after not receiving concessions under the auto policy, PSMC’s market share is not going anywhere.

It seemed Indus Motor Company (INDU) would continue to live on the fame and fortunes of its flagship variant Corolla, but the company announced an expansion of $40 million to increased capacity to 75,000 units. This despite a subdued demand for its Corolla that is getting a beating in the market because of the competition it is facing from Honda Civic/City, new SUVs and similar cars imported in the segment. The factory was also under maintenance so production remained under capacity; meanwhile, sales for the new Hilux-Rivo and Fortuner have been strong.

While Corolla numbers are bringing overall growth down, the more pertinent question is what does the upcoming developments in the auto industry mean for the automaker that currently has 30 percent of the local car market. Our rough estimations show that there will be a substantive increase in sales for higher variant cars and the competition will be much fiercer. Corolla is popular but when new models and global brands like Renault and Audi are introduced in a market, Corolla’s market share will definitely get pinched, and must be prepared to battle it out. (Read our story: “Playing your cars right: an update”)

As we said in an earlier column, despite being a much smaller ship, this is the year of Honda indeed. Honda Atlas Cars (HCAR) is selling 1,000 more cars on average during this fiscal than the last and after introducing the latest SUV, Honda-BRV, its market share in the car/jeeps and pickups segment has increased from 12 percent to 18 percent.

To say the existing carmakers aren’t prepared for the overhaul of new entrants would be unfair. Largely, they will rely on their substantial brand equity, expansions and upgrades as well as the fact that they already have a huge leg up in terms of localization, an established dealers’ network, a parts market across the country as well as secured vendors who have been working with them for years. It could take years for new entrants to penetrate into the car industry in Pakistan where the three carmakers are strongly rooted. Even so, the appetite for variety and quality amongst consumers must not be underestimated.

For many, local sales numbers may belie the future outlook but the demand is strong. Removing sales numbers for Bolan and Ravi, the sector sales (Cars, jeeps and pickups) grew by 13 percent between 11MFY16 and 11MFY17 with 18,000 more units sold this year than last. CBU imports have gone up by 31 percent overall and 20 percent for just cars. More people are using riding sharing apps in cities and more people are in fact buying new cars to join this bandwagon.

Copyright Business Recorder, 2017

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