Lahore - Pakistan tractor segment reported 5 percent annual increase in sales for 2MFY17 to 3,832 units. According to latest figures released by Pakistan Automotive Manufacturers Association (PAMA), for the month of Aug 2016, sales improved 19 percent YoY to 2,391 units.

Uptick in sales can be attributed to improved farmer economics. There is clarity on tractor subsidy scheme due to which farmers have resumed normal purchases which they were holding out. Moreover, roll out of Kissan Package and improving farmer income after pickup in commodity prices is expected to improve sales during the year.

Another driver for tractor sales is this year’s budget which is full of incentives to the agriculture sector, including reduction in urea prices and financing rates. This should help improve liquidity with farmers resulting in better off-take of tractors going forward, we believe.

Trucks & Buses segment of Pakistan automobile sector has posted an increase of 77 percent YoY to clock-in at 1,415 units in the two month period.

Experts attribute this to surge in demand due to China Pakistan Economic Corridor (CPEC) and improving law & order situation in the country.

Pakistan local car assemblers (including LCVs, Vans and Jeeps) sold 31,585 units in first two months of FY17, a decline of 13 percent YoY. Excluding taxi units, sales are up 19.7 percent YoY. This was in line with expectations.

It is expected that car sales to remain robust in FY17 despite conclusion of Apna Rozgar Taxi Scheme and expect car sales to clock in at 217k units, an increase of 30 percent YoY (ex-taxi units).

PSMC sold 16,662 units in 2MFY17 showing a decline of 26 percent YoY. This is primarily because of lower sale of Ravi and Bolan variants due to completion of the Taxi scheme. Sales remained buoyant excluding the taxi units as the company sold 10,907 units, an increase of 12 percent YoY.

INDU’s sales reduced by 2 percent YoY as company sold 9,628 units in the two month period. This is mainly due to less number of working days in July 2016 as a result of extended holidays.

HCAR sold 5,295 units in 2MFY16 showing an increase of 15 percent YoY. Sales for the month of Aug 2016 registered an increase of 59 percent YoY/50 percent MoM to 3,174.