Car sales may rise in H2: analyst

Friday, December 25, 2009
By our correspondent

KARACHI: Sales of Pak Suzuki Motor Company will be around 31,379 units in the first half (July to December) of financial year 2009-10, down 4.15 per cent year-on-year, says Furqan Punjani, an analyst at Topline Securities.

However, “we expect significant turnaround in sales’ growth in the second half due to low base effect.”

He says the company believes it can sell around 5,000 units in December, which will translate into a decline of 7.5 per cent month-on-month due to year-end effect and a robust growth of 122 per cent year-on-year primarily due to low base effect.

Last financial year, Pak Suzuki sold on an average 2,426 cars per month, significantly lower than existing monthly sales. It is expected annual sales of the company will grow by 33 per cent to 67,000 in FY10 as compared to 50,000 cars sold last year, adds Furqan.

About new Swift model, he says the company is targeting to achieve one per cent market share in overall car sales next year.

The company is launching Suzuki Swift, a 1,300cc hatchback car, in mid-January next year, which will compete with major brands in this category ie Honda City (Honda Atlas) and Toyota Corolla (Indus Motor).

Like India, the analyst says, consumers in Pakistan largely prefer hatchback vehicles. During the last three years, average 52 per cent of cars were sold in the hatchback category which includes 800cc and 1,000cc cars.

It is believed that the company is targeting the market between the 1,000cc (with hatchback) and 1,300cc (Sedan look) category. However, competition would be stiff as this segment is already crammed by two major competitors, Toyota Corolla (with 69 per cent of market) and Honda City (17 per cent) in the sedan category.