Poor New Car Sales Set To Continue
BMI View : Poor October passenger car sales have led us to downgrade our FY2013 passenger car sales growth forecast from 3.0% to -5.0%, to hit 150,000 units. Since passenger cars are part of the total vehicle sales make-up, our FY2013 total vehicle sales growth forecast has been downgraded from 2.9% to -4.0%. Given that domestic automakers need to compete with cheaper imported used cars, we believe this trend of falling sales will continue unless carmakers improve their efficiency and increase their share of local content in the manufacturing process.
October passenger car sales figures from the Pakistan Automobile Manufacturers Association (PAMA) came in at 8,184 units, down 3.5% month-on-month (m-o-m) and down 40.2% year-on-year. Year to date sales for the first four months of FY2013 (July 2012-June 2013) were equally dismal, hitting 34,990 units, down 32.4% y-o-y. BMI is downgrading its FY2013 passenger car sales growth forecasts from 3.0% to -5.0%, to hit 150,000 units. This has also resulted in a downgrade of our FY2013 total vehicle sales growth forecast from 2.9% to -4.0%.
BMI has long been bearish on the Pakistan auto industry. With used car imports competing with new car sales, it is no surprise that sales have been falling for the past few months ( see our online service, October 03, Production Woes To Continue Impacting Auto Industry). According to some reports, the superior quality of used imported cars together with their cheaper price vis-à-vis new cars produced locally makes them a more attractive option for consumers. Falling sales have also caused automakers to cut back on their production, and making the auto industry in Pakistan generally unattractive to invest in.
|More Disappointment Ahead|
|Pakistan- Domestic Passenger Car Sales, Units (LHS); Y-O-Y Change, % (RHS)|