Passenger car sales in Pakistan plummeted 29% year-over-year to 26,806 units during the first quarter of FY2013 according to data from PAMA. Rising imports of used cars and increasing prices of domestically assembled cars negatively impacted sales. Discontinuation of popular models like the Suzuki Alto and Daihatsu Cuore also affected sales at PSMC and INDU. The auto industry faces additional challenges from the phasing out of tax incentives for certain models and the overall rise in domestic auto prices.

1. 1QFY13: Car sales down 29pc, YoY
AL Habib Capital Markets (Pvt) Ltd

2. 1QFY13: Car sales down 29pc, YoY
Table of Contents Preface
Vehicle‐Wise data: Production & Sales,
Latest data released by PAMA reveals that
1QFY13
passenger cars sales have plummeted by 29pc
Vehicle Make‐Wise Data: Production & (YoY) to 26,806 units during 1QFY13.
Sales, 1QFY13
We have ‘HOLD’ stance for both, PSMC (Fair
Vendor‐Wise data: Production & Sales, Value: PKR93/‐) & INDU (Fair Value: PKR281/)
1QFY13 at current levels.
Graphical representation: Production & This short report of ours presents both, key
Sales, 1QFY13 auto data during 1QFY13 and major
challenges being faced by Pakistan’s auto
Auto sales: Issues during 1QFY13 industry!
Variables that may affect auto sector
during FY13
Disclaimer
AL Habib Capital Markets (Pvt) Ltd

3. 1QFY13: Car sales down 29pc, YoY
Vehicle‐Wise Data – Production & Sales, 1QFY13
Vehicle 1QFY12 1QFY13 %
Production
Passenger cars 33,158 29,253 ‐11.78%
Trucks & buses 615 599 ‐2.60%
Jeeps (4x4) 186 136 ‐26.88%
Pick ups 4,618 4,098 ‐11.26%
Farm tractors 4,453 11,433 156.75%
Motor cycles & three wheelers 219,941 203,400 ‐7.52%
Sales
Passenger cars 38,065 26,806 ‐29.58%
Trucks & buses 480 479 ‐0.21%
Jeeps (4x4) 187 156 ‐16.58%
Pick ups 5,442 3,579 ‐34.23%
Farm tractors 4,215 8,271 96.23%
Motor cycles & three wheelers 220,447 205,480 ‐6.79%
AL Habib Capital Markets (Pvt) Ltd

4. 1QFY13: Car sales down 29pc, YoY
Vehicle Make-Wise Data – Production & Sales, 1QFY13
Auto 1QFY12 1QFY13 Chg. (YoY; %)
Prod. Sales Prod. Sales Prod. Sales
Honda Civic 1,742 1,710 1,323 1,485 ‐24% ‐13%
Honda City 2,511 2,562 3,866 2,936 54% 15%
Toyota Corolla 10,345 10,682 8,155 7,032 ‐21% ‐34%
Daihatsu Cuore 1,155 1,282 ‐ 71 ‐100% ‐94%
Suzuki Liana 122 156 68 54 ‐44% ‐65%
Suzuki Swift 1,566 1,826 2,041 1,902 30% 4%
Suzuki Cultus 3,073 3,710 3,128 3,330 2% ‐10%
Suzuki Alto 2,932 3,633 ‐ ‐ ‐100% ‐100%
Suzuki Mehran 6,623 8,415 7,817 7,383 18% ‐12%
Suzuki Bolan 3,089 4,089 2,855 2,613 ‐8% ‐36%
Suzuki Ravi 3,481 4,586 3,069 2,377 ‐12% ‐48%
Toyota Hilux 1,132 856 1,022 1,196 ‐10% 40%
Fiat 635 950 5,339 3,489 741% 267%
Massey Ferguson 3,818 3,265 6,094 4,782 60% 46%
AL Habib Capital Markets (Pvt) Ltd

5. 1QFY13: Car sales down 29pc, YoY
Vendor-Wise Data – Production & Sales, 1QFY13
Vendor 1QFY12 1QFY13 %
Production
HCAR 4,253 5,189 22.01%
PSMC 17,405 15,909 ‐8.60%
INDU 11,500 8,155 ‐29.09%
FIAT 635 5,339 740.79%
MASSEY FERGUSON 3,818 6,094 59.61%
Sales
HCAR 4,272 4,421 3.49%
PSMC 21,829 15,282 ‐29.99%
INDU 11,964 7,103 ‐40.63%
FIAT 950 3,489 267.26%
MASSEY FERGUSON 3,265 4,782 46.46%
AL Habib Capital Markets (Pvt) Ltd

6. 1QFY13: Car sales down 29pc, YoY
Graphical Representation: Production & Sales, 1QFY13
9,000
8,000
7,000
6,000
UNITS SOLD
5,000
4,000
3,000
2,000
1,000
-
MEHRAN
FERGUSON
DAIHATSU
FIAT
SUZUKI ALTO
SUZUKI
SUZUKI
SUZUKI
SUZUKI RAVI
SUZUKI LIANA
TOYOTA
HONDA CITY
SUZUKI
COROLLA
CULTUS
HONDA CIVIC
BOLAN
SWIFT
TOYOTA
HILUX
MASSEY
CUORE
BRAND
PROD. SALE
AL Habib Capital Markets (Pvt) Ltd

7. 1QFY13: Car sales down 29pc, YoY
Auto sales: Issues during 1QFY13
Issues Reasons
Drop in auto sales Rising imports of used cars;
Rising financing by banks & leasing companies of
used cars;
Rising prices of domestically assembled cars;
Discontinuation of Alto & Cuore;
Discontinuance of Alto & Cuore Discontinuation of Alto mitigated by surge in sales
of Mehran;
Discontinuation of Cuore negatively affected
INDU’s volumetric sales forcing it to rely on Corolla
sales;
AL Habib Capital Markets (Pvt) Ltd

8. 1QFY13: Car sales down 29pc, YoY
Variables that may affect auto sector during FY13
Steps Impact
Phasing out of Yellow Cab Scheme Negative for volumetric sales of Suzuki Mehran &
Bolan;
Discontinuation of Alto & Cuore Resultant drop in volumetric sales of PSMC & INDU;
Rising domestic auto prices Negative for sales of domestic auto assemblers;
Import of used cars Negative for domestic auto sector sales ‐ Imported
cars are preferred due to both competitive price
and perceived higher quality;
Rising rural incomes
Positive for sales of Corolla;
Introduction of new model cars Positive
AL Habib Capital Markets (Pvt) Ltd

9. Disclaimer
All rights reserved. The information
presented in this report is compiled from Head Office:
sources we believed to be reliable in GF‐01, Techno City,
preparation of this report. However, we do Hasrat Mohani Road, Karachi
not accept any responsibility for its Ph: +92 21 32270808‐13
accuracy and completeness. This report is
Fax: +92 21 32270519
not intended to be an offer or solicitation
to buy or sell any security. AL Habib Capital Stock Office
Markets (Pvt.) Ltd. and its employees may
Room No. 16 Ground Floor,
or may not have a position in or with
respect to the securities mentioned in this New Stock Exchange Bldg.,
report. In particular, the report takes no Stock Exchange Road, Karachi
account of investment objectives, financial Ph: +92 21 32460867‐ 32460869
situation & particular needs of investors
who should seek further professional
advice or rely upon their own judgment
before making any investment.
Date of distribution: Oct 11, 2012
AL Habib Capital Markets (Pvt) Ltd