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Pakistan Car Sales Up 72%; Cement Sales Rise 16.89%

RiazHaq

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Haq's Musings: Pakistan Economy: Car Sales Up 72%; Cement Shipments Rise 16.89%

Pakistan auto industry is booming. Toyota, Suzuki and Honda factories are working around the clock in the southern port city of Karachi and eastern city of Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered, according to media reports. At the same time, increased construction activity is visible everywhere in the country.



Local car sales, excluding imported cars, jumped to 54,812 units in the first three months (Jul-Sep) of fiscal year 2016, up 72% from 31,899 units in the same period of last year, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

Pak Suzuki led the pack with 33,770 units followed by Indus Motors (Toyota) 14,767 cars and Honda Motors 6,184 units. Industry analysts at Topline Securities expect local car sales to reach 203,653 units during the current fiscal year.

Car sales (excluding imported ones) in Pakistan grew at a five-year (FY11-15) compound annual growth rate (CAGR) of just 5.3% to 179,953 units. While volumes surged by 31% in fiscal year 2015 (FY15) on the back of the new model of Toyota Corolla, Punjab taxi scheme and an increase in car financing due to 42-year low interest rates in the country also helped, according to Express Tribune newspaper. “We forecast local car sales to grow at 13% in FY16 to reach 203,653 units,” Topline Securities reported on Monday.


In addition to car sales, domestic cement sales have also jumped by a phenomenal 16.89% to 4.29 million tons during July and August 2015 from 3.67 million tons shipped in the same period last year.

Car sales andconstruction activity are both believed to be driven by low interest rate financing available from banks andimproved security situation across the country. With record low inflation, the State Bank of Pakistan (SBP), the nation's central bank, has cut discount rate to a 42-year low of 6%.

After its September meeting, the SBP said the rise in fixed investment financing in the energy generation and distribution, chemicals and services sectors signal possible increase in their productive activity in coming months. “The implementation of infrastructure development and energy projects under the China-Pakistan Economic Corridor (CPEC) will further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in 2015-16, which is expected to boost credit uptake,” it said.

A dramatic decline in terrorist violence in the country since the launch of Pakistan Army's Operation Zarb-e-Azb and big declines in international oil prices have helped drive economic recovery in the country in recent months.

Related Links:

Haq's Musings

Pakistan Auto Industry

Record Cement Sales Raise Hope Of Pakistan Economic Recovery

Credit Suisse Bullish on Pakistan Cement Industry

China-Pakistan Economic Corridor

Pakistan Army Acts Against Terrorists

Pakistan Middle Class Larger & Richer Than India's

Top Global Investor Bullish on Pakistan


Haq's Musings: Pakistan Economy: Car Sales Up 72%; Cement Shipments Rise 16.89%
 

Arya Desa

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Not a good sign. It means the consumer is taking out debt to buy cars as the national growth rate is <4% and the macroeconomic indicators aren't so positive.
 

Faiez

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Not a good sign. It means the consumer is taking out debt to buy cars as the national growth rate is <4% and the macroeconomic indicators aren't so positive.
the extra car sales this year is mainly from the massive gov. order for 50,000 cars.

the construction boom is from the gov. spending massively on questionable infrastructure projects. Although there is decent growth in private construction as well (houses, shopping malls, plazas etc)
 

RiazHaq

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the extra car sales this year is mainly from the massive gov. order for 50,000 cars.

the construction boom is from the gov. spending massively on questionable infrastructure projects. Although there is decent growth in private construction as well (houses, shopping malls, plazas etc)
I don't understand why any good news about Pakistan is hard to digest for some of the posters here. The figures I quote in my post are industry figures, not government figures.
 

Echo_419

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Haq's Musings: Pakistan Economy: Car Sales Up 72%; Cement Shipments Rise 16.89%

Pakistan auto industry is booming. Toyota, Suzuki and Honda factories are working around the clock in the southern port city of Karachi and eastern city of Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered, according to media reports. At the same time, increased construction activity is visible everywhere in the country.



Local car sales, excluding imported cars, jumped to 54,812 units in the first three months (Jul-Sep) of fiscal year 2016, up 72% from 31,899 units in the same period of last year, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

Pak Suzuki led the pack with 33,770 units followed by Indus Motors (Toyota) 14,767 cars and Honda Motors 6,184 units. Industry analysts at Topline Securities expect local car sales to reach 203,653 units during the current fiscal year.

Car sales (excluding imported ones) in Pakistan grew at a five-year (FY11-15) compound annual growth rate (CAGR) of just 5.3% to 179,953 units. While volumes surged by 31% in fiscal year 2015 (FY15) on the back of the new model of Toyota Corolla, Punjab taxi scheme and an increase in car financing due to 42-year low interest rates in the country also helped, according to Express Tribune newspaper. “We forecast local car sales to grow at 13% in FY16 to reach 203,653 units,” Topline Securities reported on Monday.


In addition to car sales, domestic cement sales have also jumped by a phenomenal 16.89% to 4.29 million tons during July and August 2015 from 3.67 million tons shipped in the same period last year.

Car sales andconstruction activity are both believed to be driven by low interest rate financing available from banks andimproved security situation across the country. With record low inflation, the State Bank of Pakistan (SBP), the nation's central bank, has cut discount rate to a 42-year low of 6%.

After its September meeting, the SBP said the rise in fixed investment financing in the energy generation and distribution, chemicals and services sectors signal possible increase in their productive activity in coming months. “The implementation of infrastructure development and energy projects under the China-Pakistan Economic Corridor (CPEC) will further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in 2015-16, which is expected to boost credit uptake,” it said.

A dramatic decline in terrorist violence in the country since the launch of Pakistan Army's Operation Zarb-e-Azb and big declines in international oil prices have helped drive economic recovery in the country in recent months.

Related Links:

Haq's Musings

Pakistan Auto Industry

Record Cement Sales Raise Hope Of Pakistan Economic Recovery

Credit Suisse Bullish on Pakistan Cement Industry

China-Pakistan Economic Corridor

Pakistan Army Acts Against Terrorists

Pakistan Middle Class Larger & Richer Than India's

Top Global Investor Bullish on Pakistan


Haq's Musings: Pakistan Economy: Car Sales Up 72%; Cement Shipments Rise 16.89%
I thought promoting personal blogs was banned here :what:
On topic
Looks like Chinese investment in CPEC is paying off :china:

From Global Cement:

Quoting a recent study, Alam said that the per capita cement consumption in Bangladesh was still low at 107kg, compared to 210kg in India, 265kg in Pakistan, 310kg in Sri Lanka and 570kg in Korea, indicating future growth of Bangladeshi cement consumption.

MI Cement to add new unit soon - Cement industry news from Global Cement


Damm,show hom much scope for improvement there is in India & South Asia
 

VCheng

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the extra car sales this year is mainly from the massive gov. order for 50,000 cars.

the construction boom is from the gov. spending massively on questionable infrastructure projects. Although there is decent growth in private construction as well (houses, shopping malls, plazas etc)
50k cars @ approx Rs. 1 million each would be Rs. 50 billion, or about USD 475 million. Half a billion dollars. Where is this money coming from, if you are correct?
 

VCheng

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Ultimately it all comes from the people.
The people in Pakistan are rich, but the government is poor indeed and in no way capable of affording 50,000 cars as was claimed earlier. If they are indeed buying these cars, then my question about where the money is coming from the budget is what is appropriate to ask, not "ultimately" where the money comes from. Which budget allocation has a spare half a billion dollars lying around?
 

airmarshal

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I have a feeling people are going to credit this to the army as well.
Yes! At least for Karachi, army to be credited for peace there. Now dont tell me Sharif is leading the operation there. Sharif is in league with his brother Zardari. Thats where two are two together - on the political front.
 

RiazHaq

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The people in Pakistan are rich, but the government is poor indeed and in no way capable of affording 50,000 cars as was claimed earlier. If they are indeed buying these cars, then my question about where the money is coming from the budget is what is appropriate to ask, not "ultimately" where the money comes from. Which budget allocation has a spare half a billion dollars lying around?
Have you ever heard about sovereign guarantees for loans?

These are finance schemes where the govt stands behind the loan in the event of default.

And what allows the govt to do so? The taxpayers!!! That's true everywhere, not just in Pakistan.
 

silent hawk

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Yes! At least for Karachi, army to be credited for peace there. Now dont tell me Sharif is leading the operation there. Sharif is in league with his brother Zardari. Thats where two are two together - on the political front.
I told you doesn't really say it.
 

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