AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

The unit sales of locally assembled automobile are expected to face a double-digit decline on YoY basis in FY19, due to non-filers restriction and varying microeconomic landscape. According to Topline Research, the unit sales of local OEMs is likely to face 11 percent decline YoY in FY19, due to changing macroeconomic landscape and impact of regulatory change.
Despite deteriorating macroeconomic environment and law restricting non-filers from purchasing cars, the auto sector witnesses on average 28% Year to Date (YTD) decline in auto stocks as compared to 5% YTD rise in KSE-100 index, which indicates that market has priced in most of the unfavorable sector outlook. The Topline anticipated GDP growth at 4-4.5% for FY19 as compared to 5.8% in FY18 as fiscal austerity measures, rupee depreciation and monetary tightening are expected to curtail overall aggregate demand. Moreover, the slowdown in auto financing due to unexpected interest rate hike, which is likely to reach the policy rate to 8.5% by this December.
It stated that outstanding car financing declined in June 2018, which was a first such fall after a period of 18 months, pointing towards a potential slowdown; adding that the restriction on non-filers in budget FY18-19 from purchasing cars was estimated to lead to a decline in volumes next fiscal year as approximately 40% of auto clients were non-filers. However, the impact on demand will vary across companies due to differences in their respective client base.
It said that the Compound Annual Growth Rate (CAGR) of 10% to 2% and downward revision of gross margin from on average estimate of 12% to 9% during the same period owing to PKR depreciation, volatility in steel prices, delayed roll out of new models, high interest rates and regulatory changes.

Copyright Business Recorder, 2018

Comments

Comments are closed.