Car Sales up 29% in March 2022
Car sales of local assemblers are likely to grow by 29% to 25,720 units in March 2022.
The sales stood at 20,009 units during the same month last year, led by Pakistan Suzuki (PSMC).
Barring PSMC, sales growth may slow down at 9%.
Our estimates include provisional sales of major local players listed on the PSX, Sherman Research said.
Company-wise data shows PSMC is likely to post exceptional sales growth of 48% on yearly basis to 15,000 units in March 2022.
The main contributing factor is the growing demand for low-end category cars, especially Alto.
The main reasons are the rising price differential versus high-end vehicles and fuel efficiency after a spiking in oil prices.
Honda Atlas Cars (HCAR) is likely to register sales of 3,650 up 16%YoY.
The new variant City is to follow it whereas the company’s flagship new Civic is also on roads that supported volumes.
Similarly, sales of Indus Motors (INDU) may post a growth of 6% to around 7,070 units — the highest monthly sales ever.
The major reason behind this growth is a rebound in sales of the company’s flagship brand ‘Corolla’.
On a sequential basis, INDU and HCAR sales are likely to remain upbeat by posting growth of 53% MoM and 33%MoM respectively.
It is due to the low base effect as sales remained muted in the previous month amid supply constraints.
INDU’s sales are likely to rebound due to better sales of Corolla while HCAR may phase out of the civic old model.
On a cumulative basis (1QCY22), car sales to grow by 25%YoY in March 2022.
PSMC car sales may grow by 31%YoY, followed by HCAR (30%) and INDU (12%).
Even though local car assemblers have recently raised car prices, rupee devaluation remains a concern in short term.
Thus, if devaluation continues and international steel prices continue to remain firm, another price hike may be on the cards.
However, so far, car sales have shown resilience and have remained unaffected by rising prices.
Having said that, a hike in interest rate may affect car leasing eventually reducing demand going forward, Sherman Research said.
