Categories: Economy

April Autos sales number expected to grow

Recovery Expected in Auto Sales Despite Month-on-Month Decline

In April 2024, the Pakistani automotive industry is anticipated to showcase substantial growth in sales compared to the same period last year, according to projections. While month-on-month (MoM) sales are expected to dip by 8% due to the base effect from previous plant closures, the year-on-year (YoY) comparison is promising, with significant increases across major auto companies.

YoY Projections

  • HCAR: A fivefold increase in sales YoY is anticipated, largely attributed to a low base effect as the plant was shut down for the entire month of April last year. However, on a MoM basis, sales are expected to halve from March 2024.
  • PSMC: Sales are predicted to jump by three times YoY.
  • INDU: Sales are expected to rise by 3% YoY in April 2024.

To leverage the favorable PKR/JPY exchange rate movement, local auto manufacturers have introduced price cuts on weaker selling car variants for a limited period. These initiatives may drive some sales growth, although sustained recovery in the sector is likely to be tied to broader economic improvements and declining auto-financing rates.

Company-wise Sales Trends

The three major listed auto companies are poised for robust YoY sales growth in April 2024 despite a MoM decline.

Company Sales Overview (April 2024 Estimates)

CompanyFeb-24Mar-24Apr-24EMoMΔYoYΔ
PSMC4,8854,1014,3005%192%
HCAR1,5172,1881,030-53%398%
INDU2,0361,7052,00017%3%
Source: PAMA, JS Research

Price Cuts to Boost Sales of Weaker Variants

The recent strengthening of the Pak Rupee against the Japanese Yen (JPY) has enabled local auto assemblers to announce price reductions on certain underperforming car models. Notable reductions include:

  • PSMC: Slashed prices of Swift models by 2%13% for a limited period.
  • Other Manufacturers: Lucky Motors cut prices by 25% for KIA Stonic, and 6% for Cherry Togo.
  • INDU and HCAR: Earlier reduced Yaris and City prices by 1%3% in March 2024.

Continuing Decline in Auto Financing

Despite optimistic sales projections, the auto financing sector continues to experience a substantial year-on-year decline. In March 2024 alone, auto financing loans witnessed a 24% YoY decrease. High interest rates, averaging over 22%, coupled with limited availability of loans, have dampened consumer demand. However, expectations of interest rate softening in FY25 are anticipated to spur demand growth.


Disclosure:

The information in this article is based on research by JS Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.

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