March 26, 2003	Wednesday	Muharram 22, 1424

KARACHI, March 25: Declining interest rates, persistent inflow of home remittances and frequent model change remained the key factors in pushing car sales up by 37 per cent in the July-February 2002-03 period as compared to the same period of 2001-02.

Genuine buyers, investors, multinationals and market players bought 35,405 units in the last eight months of current fiscal, as against 25,812 units in the corresponding period of last fiscal.

The bullish trend in car sales is expected to continue due to increase inflow of booking up to November-December, particularly in bigger sedans, an auto analyst said. The rise in car sales is in sharp contrast to the international market where auto makers are quite worried over the on-going US-Iraq war, he said.

A total of 6,893 Toyota Corolla were sold as compared to 3,615 units in July-February 2001-02, while sales of Honda Civic plunged by six per cent to 2,687 units as compared to 2,861 units owing to change of model. In February only 20 Honda VTI cars were produced and sales stood at five units as compared to production of 335 units and sales of 335 units in February 2002.

Suzuki Mehran continued to dominate the market in small segment with sales touching to 9,099 units in July-February 2002-03 as compared 5,531 units in the same period of 2001-02, up by 64 per cent.

Data compiled by Pakistan Automotive Manufacturers Association (PAMA) said sales of Suzuki Cultus peaked to 4,879 units from 3,521 units, up by 38.56 per cent. Alto 1000cc sales rose by 46.5 per cent to 2,789 units from 1,903 units. A total of 1,511 units of Suzuki Baleno were sold out as compared to 634 units, rising by 138 per cent.

Sales of Dewan’s Santro, which witnessed a new model last month, plunged by seven per cent to 1,477 units from 1,587 units. Daihatsu Coure sales went up by 46 per cent to 2,851 units from 1,956 units. Honda City sales surged by 14.6 per cent to 2,497 units from 2,179 units.

The last one-and-a-half months saw half yearly results of leading assemblers. A week back, the Pak Suzuki announced its results with a disappointment for its shareholders by declaring low dividend of Rs3 per share as compared to the market expectation of Rs6-8 on the healthy cash flow position of the company.

The Indus Motors, last month declared an interim dividend of Rs2 per share along with its first half 2002-03 results. Its earning per share (EPS) increased by 488 per cent from Rs0.90 to Rs5.31 per share largely owing to a 79-per cent increase in net sales to Rs6.1 billion from Rs3.4 billion following the introduction of new Corolla. Sales of Honda Atlas Cars rose to 3.363 billion in July-December 2002-03 from Rs3 billion, and the company earned a profit before tax of Rs340 million as compared to Rs222 million. The EPS increased to Rs5.29 per share from Rs3.42 per share.

As things are now moving swift for the car market in the wake of expensive model change and somewhat clear political and economical course, market analysts see no adverse impact on the car sales, keeping in view huge booking made by the buyers for the upcoming five to six months.

However, the market has been awaiting to see materialization of the pledge made by Industries and Production Minister Liaquat Ali Jatoi two months back over the possible cut in car prices. The minister has been watching the situation as a silent spectator and the assemblers seem in no mood to slash prices.

An analyst at InvestCap said during 2002, Pakistani rupee gained around 3.4 per cent against most of the currencies, including Japanese yen, as compared to 2001. Assemblers, who heavily rely on imported kits, had saved a lot on imports. Their gross margins had also improved: and for instance gross margin of the Pak Suzuki rose to 13 per cent from seven per cent.

Assemblers have geared up the production to double shift from this month to clear the backlog of old bookings and to eliminate the practice of premium in the market, which according to market people, is still going on.

Sales of Japanese assembled motorbikes (Honda, Yamaha and Suzuki) also performed satisfactory, climbing by 34 per cent to 101,365 units in July-February 2002-03 from 75,543 units in the same period of 2001-02, thanks to good crop of cotton and wheat followed by cheap financing by some leasing companies and banks.