Auto Sales Preview: Return to a robust growth path

May 06, 2021 (MLN): Auto sector is likely to continue strong growth sales in the month of April 2021. Auto dispatches (passenger cars and light commercial vehicles) will bounce back from the worst April 2020 on record- during the COVID-19 pandemic lockdown- to cross 16k units in April 2021.

While country’s auto sector sales are expected to clock in at 146k units during 10MFY21.  

To note, the unique scenario of zero sales was reported in the same month last year owing to pandemic-induced lockdown, Senior Analyst, Ahmed Lakhani at JS Global Capital said.

With many people making the abrupt shift last year to work from home, facing financial and economic uncertainty and driving far less for leisure activities, the sector hit hard by the abrupt halt in operations due to pandemic.

The strong traction in light commercial vehicle (LCVs) and passenger cars (PCs) sales is likely to continue owing to sustained improvement in economic activity. The consumer sentiments in the PV segment remain strong on the back of preference for personal mobility while pickup in the economy has helped improved LCVs dispatches.

Company-wise, Pak Suzuki Motor Company (PSMC) is likely to top the monthly volumetric sales chart.

The company is expected to have sold 8.6k units of PCs and LCVs in April 2021, with nearly half of the total volumes contributed by the Suzuki Alto 660cc. Moreover, strong support is expected from Wagon-R and Cultus brands, he said.

While Indus Motor Company (INDU) is likely to secure the second spot on a monthly chart. The report said that the company is anticipated to have sold 5.4k units in Apr-2021 on the back of sustained demand for the Toyota Yaris, coupled with higher expected volumes for its higher-end brands amid improved demand due to favourable agriculture sector dynamics, and international travel restrictions leading to consumers employing their savings elsewhere, such as in-car purchases.

According to the JS Global Analyst, Honda Atlas Cars (HCAR) is expected to have sold 2.3k units during the month as competition from Yaris and new entrants and anticipation of a new generation City launch might result in customers holding off purchases for the time being.

Beyond April, Ahmed Lakhani expects auto volumes to retain their buoyancy given cheap car financing, higher agricultural incomes and new model launches. On the other hand, with the new competition in the frame, market shares of the Big 3 will undoubtedly face some attrition, particularly considering that yet more introductions are expected by the new entrants before June 30, 2021, he cited.

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Posted on: 2021-05-06T17:42:00+05:00

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