Morning Call about Auto Data – Arif Habib Limited

Karachi, November 13, 2012 (PPI-OT): Alarming bells for Autos, except INDU!

The Pakistan Automotive Manufacturers Association (PAMA) recently announced auto sales and production figures for the month of Oct-12.

According to Arif Habib Limited, as per the latest available data, car and LCV sales witnessed a massive 32% YoY decline during 4MFY13, while this figure was lowered by 3.3% MoM in Oct-12. Segment-wise break-up reveals that the 1,000-1,300cc segment took the most severe battering with sales declining by 56% YoY during 4MFY13, while this figure was down by 4.4% MoM in Oct-12. This was followed by the economy segment (less than 1,000cc) that witnessed a decline of 27% YoY in 4MFY13, and 20% MoM in Oct- 12. The high-end segment (1300cc+) also shrank by 24% YoY in 4MFY13, while on a monthly basis the segment surprisingly achieved a growth of 9% MoM to 4,275 units.

Auto DataOct-12Sep-12MoMOct-11YoY4MFY134MFY12YoY
1300cc and above

4,275

3,917

9%

6,628

-36%

17,684

23,373

-24%

1000cc

987

1,022

-3%

2,391

-59%

4,317

9,734

-56%

<1000cc

2,052

2,553

-20%

3,249

-37%

9,506

12,946

-27%

Total cars

7,314

7,492

-2%

12,268

-40%

31,507

46,244

-32%

LCV’s + 4×4

2,083

2,229

-7%

2,839

-27%

8,431

12,527

-33%

Total

9,397

9,721

-3%

15,107

-38%

39,938

58,771

-32%

Company wise

Oct-12

Sep-12

MoM

Oct-11

YoY

4MFY13

4MFY12

YoY

PSMC

5,094

6,042

-16%

8,462

-40%

22,753

34,877

-35%

INDU

2,704

2,120

28%

4,986

-46%

11,003

17,806

-38%

HCAR

1,588

1,530

4%

1,621

-2%

6,009

5,893

2%

Source: PAMA        

PSMC: Struggle continues

Pakistan Suzuki Motor Company Limited (PSMC) registered a sales decline of 40% YoY to 5,094 units but continued its performance as a market leader despite a 2% YoY decline in market share to 57%. On a MoM basis, the company suffered a 16% decline in its sales volume in Oct-12. The reason behind this decrease was: 1) discontinuation of Alto, which was PSMC’s leading brand in 1,000cc category 2) the influx of imported Japanese cars 3) completion of the Punjab gov’t taxi scheme 4) discontinuation of CNG vehicles and 5) year-end phenomenon. Company’s variant wise data reveals that all the segments registered decline in sales during Oct-12. Only Liana was able to register an apparently huge growth of 256% MoM and 166% YoY, to 32 units. On the other hand, variants i.e. Swift, Cultus, Mehran, Bolan and Ravi, showed a MoM decline of 18%, 3%, 20%, 12% and 24% respectively.

INDU: Corolla supporting the sales growth

Likewise, Indus Motor Company Limited (INDU) experienced sales contraction of 46% YoY during Oct-12 to 2,704 units. On 4MFY13 basis, company’s sales were down by 38% YoY to 11,003 units, while on monthly basis, INDU managed to sell 2,704 units, translating into a decent growth of 28% MoM. The main reason behind this increase was company’s smart move of introducing metallic colors in its XLI variant, which comprises approximately 70% of Corolla sales. In Oct-12 alone, Corolla’s sales jumped by 22% MoM to 2,704 units, however, this figure was still down by 52% YoY. Commendably, Hilux’s sales also improved magnificently by 126% YoY and 57% MoM, to 549 units. This increase can be attributed mainly due to upcoming elections that may have speeded up this variant’s sales. And Arif Habib Limited assumes the buying trend for this variant to further lift up as elections get closer. Company’s market share was moderately down 2% YoY to 28% in 4MFY13.

HCAR: New Civic breathes life into volume growth

Honda Atlas Car (HCAR) sales showed a modest growth of 2% YoY in 4MFY13, while on a MoM basis, sales of the company increased by only 4%. Civic’s sales unveiled a whopping growth of 50% YoY, while this figure was up by 3% MoM. The growth in Civic’s sales can largely be attributed to the launch of its new model. Moreover, City’s sales also improved by 4% MoM while it was down by 28% YoY. Market share of HCAR increased from 9.78% to 15.33% in 3MFY13.

Tractor sales massively up in Oct-12

As far as Tractor’s sales volume is concerned, it went up enormously by 125% MoM in Oct-12, to 5,712 units. Al-Ghazi Tractors led the way with astonishing sales growth of 87% YoY and 300% MoM, to 2,338 units. Millat Tractors followed the suit and managed to achieve significant sales growth of 20% YoY and 68% MoM, to 3,374 units. The major reason behind this massive volume growth in this segment of Autos was the tractor scheme for farmers launched recently by the Federal as well as the Punjab government.

Recommendation

Arif Habib Limited has a ‘Buy’ stance on INDU as the recent battering in its scrip allows an upside potential of 13% with a target price of PKR 280.2/share. Arif Habib Limited recommends ‘Hold’ on PSMC with a target price of PKR 99/share.

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