JS Securities Limited - JS Research.

Karachi -- November 08, 2019 (PPI-OT)

Demand to remain dismal for autos in October

We expect volumes to remain subdued during the month, declining by 57% YoY to 10,810 units, compared to 24,906 units in Oct-2018.

Honda Atlas (HCAR) could potentially witness the biggest contraction in demand yet again, with an anticipated 72% YoY plunge in volumes.

Indus Motor Company (INDU) is likely to follow suit with a 61% YoY drop in unit sales forecasted.

Pak Suzuki Motor Company's (PSMC) volumes are expected to shrink by 48% YoY.

As has been the case over the previous few months for autos, Oct-2019 shall most likely not be an exception. We expect volumes to remain subdued during the month, declining by 57% YoY to 10,810 units, compared to 24,906 units in Oct-2018. Honda Atlas (HCAR) could potentially witness the biggest contraction in demand yet again, with an anticipated 72% YoY plunge in volumes. Indus Motor Company (INDU) is likely to follow suit with a 61% YoY drop in unit sales forecasted. The reasons are unchanged for such a drastic dip in demand for the OEMs, i.e. cars have become too costly for consumers following huge spikes in car prices following bouts of devaluation and FED imposition on assemblers.

Additionally, disposable incomes have been hurt due to higher inflation this year and higher interest rates have also impacted the buying decision. Pak Suzuki Motor Company (PSMC), which has so far faced a smaller decline in comparison to its peers and avoided plant shutdowns due to high...