Sector Update - Autos

AsiaPac | Pakistan | Equities

Automobiles & Parts

Friday, 10,Jan-2014

Auto Sector: Industry sales up 6.5%YoY in 6MFY14

Car sales up 5% YoY In 6MFY14: Pakistan Automotive Manufacture Association
(PAMA) has released its sales and production data for Dec-13. Stats show 5%YoY rise
in car sales (-15%MoM). According to the data, total industry sales (including
Cars+LCVs+Jeeps) went up 6.5%YoY to 61,252 units in 6MFY14, though sales
declined 7.5%MoM. The 1300cc segment posted 6%YoY growth along with 20%YoY
growth in the Pick-ups segment. Stats continue to show massive growth of 123% for
the jeep segment owing to late launch of Fortuner in FY13. PSMC, INDU and HCAR
showed 3%, 3% and 20%YoY growth respectively attributing ~0.1%, 9% and
50%MoM decline respectively.

Import influx hurting local assemblers: PSMC enjoyed 100% market share in
800cc and 1000cc segment. However it had just 10% market share under the 1300cc
segment with a total market share of 58% in 6MFY14. Cumulatively, numbers show
3%YoY growth to 35,492 units (-0.1%MoM). With Fortuner, INDUs market share
stood at 48% in Jeep segment while Hilux gave 26% market share in Pick-ups
segment. Stats indicate a meager 3%YoY growth in total volumetric sales (-9%MoM)
with a cumulative market share of 25% to 15,179 units. Meanwhile, HACRS market
share in 1300cc segment stood at 39% (6MFY13 35%) with total market share of 16%
in 6MFY14 to 9,989 units.

Sector Market Data

Avg Daily T/O (PKR-mn)

0.34

Avg Daily T/O (USD-mn)

0.003

Avg Daily T/O (Share-mn)

22.72

Mkt Cap (PKR mn)

49,084

Mkt Cap (USD mn)

465

P/B

2.32

P/E

9.25

EV/ EBITDA

4.38

Free Float (%)

25

Source: Bloomberg

Industry sales down 7.5%MoM: The year end phenomenon has taken its toll on
total industry sales which has fallen -7.5%MoM to 8,868 units in Dec-13. As the
industry awaits AIDP-II, we hear rumors about GOP increasing the imported used car
age policy to 5 years from 3 years. This can be devastating for the local industry
which is already struggling to cope with consumer demand. After an intensive survey
we have noted the sudden change in consumers choice who according to several
dealers are preferring imported Japanese cars over locally assembled cars. HCAR was
driving the industry sales up since few months owing to its new models. However,
recent stats for HCAR indicate a massive 50%MoM fall to just 655 units (Nov-13
1,310 units). While we fancy the future of Hybrid technology in Pakistan, outlook for
local industry remains gloomy as Toyotas Corolla has also aged out and is depicting
continuous decline in sales. The new model of Corolla is expected in Jun-14 after
which we expect local sales to pick up.

Stocks Performance (52 weeks)

(%)
Absolute

1M

3M

12M

10%

19%

65%

6%

22%

58%

-3%

4%

-7%

KSE100
Relative to Mkt
Source: Bloomberg

Automobile Sales 6MFY14

Segment performance

6MFY14 6MFY13

YoY

Dec13

YoY MoM

1300 a nd a bove

25,365

23,955

6%

2,544

-3% -29%

7,255

6,193

17%

1,384

64%

10%

800 cc & Bel ow 1000cc

20,259

20,439

-1%

3,285

-16%

-8%

Total Cars

52,879

50,587

5%

7,213

-2% -15%
361% 242%

1000 cc

JEEPS (4X4)

472

212

123%

106

8,097

6,741

20%

1,743

PSMC

35,492

34,324

3%

5,981

INDU

15,179

14,699

3%

1,982

HCAR

9,989

8,293

20%

655

-24% -50%

592

224

164%

250

862% 136%

61,252

57,540

6.5%

8,868

5% -7.5%

PICK UPS

67%

56%

Company wise (Cars + LCVs & 4x4)

Others
Total Industry sales

-0.1% -0.1%
26%

-9%

Source : PAMA, Alt Research

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