SUV May Sales to Improve – Which stocks will benefit?

Increase in overall car sales

The provisional auto sales figures for May 2024 reveal a mixed performance among Pakistan’s leading car assemblers. Overall, the sales of four major car manufacturers are estimated to have increased by 4% month-on-month (MoM) to 10,030 units.

Segment-wise performance

SUV Sales Surge

The SUV segment, comprising players associated with PAMA, saw a significant improvement. Estimated SUV sales increased by 18% MoM to 2,105 units. This rising demand for SUVs is attributed to better features, fuel economy, and value for money compared to sedans.

Sedan Sales Decline

In contrast, sedan sales experienced a substantial decline, dropping by 31% MoM to 1,978 units. This shift indicates a growing consumer preference for SUVs over sedans.

Company-specific trends

Pak Suzuki Motor Company (PSMC)

PSMC‘s sales remained flat at 6,015 units in May. Despite this stagnation, PSMC maintained its position as the market leader.

Honda Atlas Cars (HCAR)

HCAR reported a notable increase in sales, with 1,185 units sold in May, marking an 18% MoM rise. This growth was mainly driven by a significant increase in HR-V sales, which doubled compared to the previous month.

Indus Motors (INDU)

Indus Motors saw a slight decline in sales, down by 1% MoM to 2,050 units in May. The decline in Corolla and Yaris sales was offset by the performance of the Corolla Cross SUV. INDU’s sales were impacted by plant shutdowns due to low inventory and parts shortages, effects of import restrictions that still linger.

Sazgar Engineering Works (SAZEW)

SAZEW experienced a significant boost in SUV sales, with units rising to 780, up 42% MoM. This surge led to an increase in Sazgar’s SUV market share to 37%, compared to 31% in the previous month.

Key Data

Metric	Value
Sector	Automobile Assembler
Current Market Cap.	Rs 459 bn
Current Turnover	17.9 mn sh
Current Traded Value	Rs 3.8 bn
3m Avg. Market Cap.	Rs 446 bn
3m Avg. Turnover	17.0 mn sh
3m Avg. Traded Value	Rs 2.9 bn
6m Avg. Market Cap.	Rs 431 bn
6m Avg. Turnover	13.0 mn sh
6m Avg. Traded Value	Rs 2.2 bn
12m Avg. Market Cap.	Rs 431 bn
12m Avg. Turnover	13.0 mn sh
12m Avg. Traded Value	Rs 2.2 bn

Car Sales by Local Assemblers

Units	11MFY23A	11MFY24E	YoYD%
PSMC	62,354	47,548	-24%
INDU	29,258	17,816	-39%
HCAR	16,572	12,117	-27%
SAZEW	1,598	4,503	182%
TOTAL	109,782	81,984	-25%

SUV Sales by Local Assemblers

Units	MAY24E	YoYD%	MoMD%
Corolla Cross	804	NM	0%
Hyundai Tucson	298	-5%	18%
Hyundai Santa Fe	143	NM	2%
Honda HR-V	80	NM	100%
Haval + BAIC	780	NM	42%
Total	2,105	NM	18%

Sedan Sales by Local Assemblers

Units	MAY24E	YoYD%	MoMD%
Civic + City	1,049	NM	10%
Corolla + Yaris	758	-11%	-56%
Sonata + Elantra	171	-16%	-17%
Total	1,978	78%	-31%

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Disclaimer:

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.