TC July-August 2021 Issue

TRADE CHRONICLE
Automobile News
Indus Motor bags multiple
awards at the International
EHS Awards
Indus Motor Company (IMC) has been
honoured by The Professionals Network
(TPN), Pakistan,for its exceptional
contribution to the Global Goals,
bagging awards in four categories at
the 7th International Environment,
Health and Safety Summit and Awards
2021.
The awards were presented by the
chief guest,DG Rangers-Sindh, Major
General Iftikhar Hassan Chaudhary, to
the Company’s CFO,Mr Mohammad’
Ibadullahand Manager-Safety, Health
and Environment, Mr Faisal Meghani.
Chief Executive IMC, Ali Asghar Jamali,
sharing his thoughts on the occasion,
said “I will start by thanking The
Professionals Network’smanagement
for providing corporates this excellent
opportunity to not just showcase their
CSR initiatives but also acknowledge
their efforts. It is an honour and we
are very humbled to be conferred with
these prestigious awards.
He added, “Being at the very forefront of
the automobile industry in Pakistan, it is
incumbent upon us thatwe demonstrate
responsible corporate conduct and our
CSR program ‘Concern Beyond Cars’ is
a testament towards that commitment.
One such very recent example has
been the COVID-19 vaccination for
100% of our employees.”
As a signatory to the UN Global Compact,
IMC is fully committed to support the
UN Decade of Ecosystem Restoration
by reducingitsenvironmental footprint.
July 2021: Highest monthly
sales since October 2018
In July 2021, Auto industry sales rose
a staggering c.80% mom to 24,918
units, on account of robust demand
for vehicles of PSMC (up c.3.0x mom)
and INDU (up 50% mom), likely due to
pent-up demand in anticipation of price
reductions for vehicles up to 1,000cc
(as per Budget FY22, effective in July).
On a yoy basis, industry sales surged
2.0x.
Among INDU models, Yaris and
Corolla volumes (up an average 35%
mom) lifted overall sales to c.6,700
units. Hilux volumes rose to c.1,280
units (low base) in July. We highlight
that this is the highest ever monthly
sales recorded by INDU since 1993
(previous high was recorded in March
2021).
PSMC also
recorded the
highest ever
monthly sales in
July of c.15,200
units, surpassing
the previous high seen in April 2018
(14,781 units), led by the sharp
rise in both Alto and Cultus sales
(up c.5.0x/85% mom respectively),
recording highest sales by a model.
Apart from Swift (up 8% mom), all
PSMC models recorded sharp double
to triple digit growth.
The strong sales is largely attributed to
the below-par sales in June (purchases
held back by customers, to avail price
cuts as per the Budget), where PSMC
is the main beneficiary of the recent
incentives for cars up to 1,000cc, in our
view.
Diamond Group investment plan
The Diamond Group of Industries,
the sponsor of one of the largest tyre
manufacturing facilities in the country,
has announced investment plans.
To keep up with the growing market
share in the country’s
south region, the Group
has announced a
HCAR sold c.2,300 units in July,
down 30% mom, dragged by the
decline in the combined sales of
Civic and City of 1,700 units, down
40% mom. We believe that the decline
was due to the phasing out of old
City, ahead of the launch of the sixth
generation model (launched on 29
July), but we believe the City will regain
the lost market share in the coming
months. Recall that HCAR sales were
also divergent in June, up 80% mom
against a 10% mom decline for the
overall industry (this reversed in July).
BR-V sales rose 27% mom, cushioning
the decline in sales.
Tractor industry recorded sales of
c.4,300 units, down c.15% mom. MTL
and AGTL witnessed an average 12%
mom decline in volumes to c.2,900 and
1,400 units, respectively. We expect
tractor sales to resume the uptrend
in the coming
months, as farmer
income continues
to expand
amid elevated
commodity prices
and renewed
government focus
on the Agri-sector.
July witnessed a sharp rise in sales
largely due to the impressive volumes
of both PSMC and INDU amid pent-up
demand as consumers awaited price
reductions following the incentives
announced in the FY22 Budget. Experts
believe that the recent incentives given
to the sector and approval of the highly
awaited Auto Policy will spur demand in
the overall sector. The conducive macro
environment (single-digit interest rates)
and influx of new models will maintain
the robust demand for cars, in their
view.
major investment in southern
Pakistan with a state-of-theart
foam and spring mattress
manufacturing facility that has been set
up at Port Qasim, Karachi.
With a capacity to produce over 1,500
units a day, the plant is all set to
serve Diamond Foam’s
growing footprint in Sindh
and the commercial hub
of Karachi.
TRADE CHRONICLE - Jul - Aug - 2021 - Page # 21