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Offline Farzooq

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Re: Auto Sector
« Reply #79 on: May 11, 2011, 02:56:05 PM »
Auto sales: 4QFY11 to see a slump   
   
  Automobile sales witnessed a growth of 13% YoY to 125,100 units during 10MFY11 compared to 110,752 units sold in the same period last year 
 Growth was led by Honda Atlas Cars (HCAR) at 26% YoY to 13,754 units followed by Pak Suzuki (PSMC) and Indus Motor (INDU) at 18% (69,203 units) and 5% (41,940 units) respectively 
 Tractor sales dropped by 3% YoY to 56K units in 10MFY11 compared to 58K units sold in 10MFY10 
 Low capacity utilization levels post Japanese earthquake would likely lead to a drop in sales during 4QFY11. Relaxation in car imports is another red flag for the industry; however, talks regarding reducing custom duty to 25% in the upcoming budget bodes positive for the sector 
 Our DCF based Dec11 Target Prices for INDU and PSMC stand at PKR212 and PKR70 respectively denoting NEUTRAL stance on both the stocks
 
 
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Re: Auto Sector
« Reply #79 on: May 11, 2011, 02:56:05 PM »

Offline M&M

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Re: Auto Sector
« Reply #80 on: May 12, 2011, 07:41:44 PM »
"The only true wisdom is in knowing you know nothing." - Socrates

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Offline ally

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Re: Auto Sector
« Reply #81 on: May 15, 2011, 01:08:30 PM »
Montly  production and sales data for April'11 has been uploaded on PAMA website and could be viewed on the link below:

http://www.pama.org.pk/images/stories/pdf/production-sale-2011.pdf

Offline Farzooq

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Re: Auto Sector
« Reply #82 on: July 12, 2011, 12:56:36 PM »
Auto sales FY11 up only 3% YoY; volumes to make a comeback
 
•According to PAMA, car and pickup sales witnessed marginal growth of 3.4% YoY to record 146,496 units during FY11, as compared to 141,654 units sold last year.
 
•Sales in Jun11 came at a 27 month low at 7,517 units, a massive decline of 55% YoY, as demand dropped in anticipation of price decreases due to 1% reduction in GST, alongside removal of 2.5% SED.
 
•Total tractor sales during FY11 declined by 3% YoY to 69,203 units, compared to sales of 71,512 units sold in FY10. MTL outshone its peer, AGTL, recording the highest ever production/sales in its history by selling 42,016 tractors in FY11, up 4.7% YoY from 40,140 tractors in FY10.
 
•After a dull Jun11, we expect sales growth to U-turn as consumer purchasing should now come in full swing on the back of pent up demand and declining prices from budgetary relief measures materializing.
 
•Post the 3.5% duty reduction announced in the Budget FY12, auto assemblers have reduced prices by 1%-2.7%.
 
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Offline Farzooq

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Re: Auto Sector
« Reply #83 on: August 12, 2011, 10:32:48 AM »

Autos: pent-up deliveries boost July sales

Sales of locally assembled cars and LCVs improved by 60% YoY to 17,563 units in July 2011. Apart from sequential improvement, deferred delivery of vehicles in June to avail tax arbitrage was the primary factor behind the jump.

In an anticipated move, all three automakers have increased prices by 1-3.7% within a month of the tax cuts to benefit from breathing space

Although volatility in commodity prices and Yen appreciation by ~4% since June should inflate production cost, we believe the price hikes should more than compensate and expect margins to improve from 3Q.

Going forward, Punjab Govt's taxi scheme and improving supplies from Japan should help in 22% YoY growth in auto sales FY12E.

PSMC (Buy, PO: PRs85) is our top pick in the autos space while Indus (Neutral, PO: PRs238) has also become attractive post recent price correction

kasb
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Offline guru1

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Re: Auto Sector
« Reply #84 on: August 12, 2011, 02:44:27 PM »

Offline Farzooq

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Re: Auto Sector
« Reply #85 on: September 13, 2011, 12:08:28 PM »
Auto sales have increased by 9%YoY to 12,117 units
in Aug 2011 mainly owing to low base of previous
year. To recall customer activity was somewhat
subdued this time last year owing to unprecedented
floods. However, on a MoM basis, sales witnessed a
decline by 31%. High base because of tax advantage
in July led to this decline on a sequential basis.
Hence, in 2MFY12 sales stood at 29,680 units – up 35%YoY.
During this period, Pak Suzuki (PSMC) sales surged by
67%YoY, while Indus Motors (INDU) witnessed an increase of
6%YoY. Going forward, we expect demand to somewhat
weaken in September owing to Eid holidays and floods in
southern parts of the country. We presently maintain our
‘Market-Weight’ outlook on the sector, with ‘Hold’ calls on
both PSMC and INDU.

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Offline Farzooq

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Re: Auto Sector
« Reply #86 on: September 13, 2011, 01:28:18 PM »

AKD Daily

Car sales up but Tractors are a different story

Latest statistics reveal a growth of 35%YoY in auto sales (both Cars & LCVs) in 2MFY12. In this regard, Car sales grew by 30%YoY to stand at 25,553 units while sales of LCVs increased by 72%YoY to stand at 4,127 units in the review period. Growth stemmed from positives announced in the FY12 Budget (Removal of SED & reduction of GST from 17% to 16%). In this regard, PSMC outperformed the sector, posting a sales volume growth of 67%YoY to 18,301 units. Sequentially however, total auto sales declined by 31%MoM, with cars sales declining by 28%MoM to stand at 10,697 units and LCV sales declining by 48%MoM to stand at 1,420 units in Aug'11. On the rural front, having first witnessed GST imposition followed by weaker farmer economics (floods, increasing nutrient prices, lower cotton prices), the tractor industry has faced a tough few months of late. In this regard, total tractor sales declined by a hefty 78%YoY to stand at 1,993 units in 2MFY12. MTL posted a sales decline of 76%YoY to 1,378 while AGTL posted a sales decline of 82%YoY to 615 units. Sequentially, while total tractor sales declined by 7%MoM to stand at 957 units, MTL's sales declined by 10%MoM to 651 units and AGTL posted flat volumes of 306 units in Aug'11. We are currently in the process of reviewing our investment case on Autos and shall update shortly.
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Offline Farzooq

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Re: Auto Sector
« Reply #87 on: September 13, 2011, 01:59:35 PM »
Auto Sales: More of a blip! Tractor sales disappoint!
 
·         Auto Sales for the mo of Aug’11 exhibited a decline of 31% MoM to 12,117 units from 17,563 units in Jul’11. On a YoY basis monthly sales for Aug’11 increased by 9.4% from 11,076 units in Aug’10. 8moCY11 figures showed an improvement of 7.4% YoY to 107,945 units from 100,538 units.
 
·         The economy segment (< 1000cc) car sales witnessed a massive decline of 45.3% to 2,247 units primarily due to a drop in PSMC’s sales. PSMC’s sales on an aggregate level witnessed a fall of 47.5% MoM as production declined across the board. Ramadan and worsening law and order situation in the middle of the month of Aug’11 impacted production. Sales were also impacted by a 2% price increase announced by manufacturers in the beginning of Aug’11.
 
·         Auto sales increased earlier in the month of Jul’11 due to price reductions by manufacturers and deferred purchases by customers who had delayed their Jun’11 purchases to benefit from price cut. In terms of market share for 8moCY11, PSMC was able to get a 55.5% share vs 33.8% of INDU. In the month of Aug’11, PSMC’s market share clocked in at 52% against 68.3% in Jul’11 with the decline in market share due to lower sales by PSMC.
 
·         Tractor sales came in much below expectations with only a total of 957 tractor units (MTL 651 units) sold in Aug’11 against 1,036 units in Jul’11. AGTL’s operations remained closed  for the entire month of Aug’11. In total only 975 tractor units were produced and that too by MTL. With the recent floods alongside unchanged dynamics with regards to farmer income, Sep’11 is expected to witness another month of lackluster demand. Moving into Oct’11, tractor demand may mark an inflexion point and one may see demand growth from current levels.

·         Outlook-Demand for cars especially PSMC is expected to remain robust going forward as the Punjab Taxi scheme is expected to start from Sep’11. Under this scheme, Pak Suzuki is expected to sell 20,000 units over an eight month period. This scheme will help buttress car demand going forward for FY12.

igi
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Offline Farzooq

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Re: Auto Sector
« Reply #88 on: October 07, 2011, 10:27:00 AM »

Autos: Stocks yet to appreciate price hikes



Both Indus Motors and PSMC have raised their selling prices twice since Jul-11 which should improve their margins, as quantum was higher than cost hike. However, contrary to historic trend, the stock prices are yet to appreciate this.

Our analysis for 2009-11 period show that stock prices of both Indus (+15.8% in 1M) and PSMC (+1.9% in 1M) react favorably to price hike announcements.

Moreover, trend analysis (2005-10) also shows auto stocks outperform KSE-100 index in 4QCY. Indus outperformed by 6% during the period while PSMC by 4%.

The stock prices may pose an initial negative reaction to QoQ weaker Sep-11 results (impact of Yen appreciation). However, attractive valuations, improving volumes and benefits of the recent price hikes trickling into earnings should help stocks in outperforming KSE-100 index during 4Q11, and beyond.

Indus (PO: PRs260) is our preferred pick in autos due to attractive valuations matrix, while we also reiterate Buy on PSMC (PO: PRs85) on its strong earnings turnaround potential following recent price hike and sales for taxi scheme


INDU valuation matrix
YE: Jun 10A 11A 12E 13E
EPS (PRs) 43.8 34.9 42.8 47.3
DPS (PRs) 15.0 15.0 20.0 26.0
P/E (x) 4.43 5.6 4.5 4.1
D/Y (%) 7.7% 7.7% 10.3% 13.4%
P/B (x) 1.2 1.1 1.0 0.9
Source: INDU, KASB Research.

PSMC valuation matrix
YE: Dec CY09 CY10 C’11E C’12E
EPS (PRs) 3.1 2.6 9.0 13.3
DPS (PRs) 0.5 0.5 2.0 3.0
P/E (x) 21.7 26.3 7.5 5.1
D/Y (%) 0.7% 0.7% 3.0% 4.4%
P/B (x) 0.4 0.4 0.4 0.3
Source: PSMC, KASB Research.
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Offline Farzooq

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Re: Auto Sector
« Reply #89 on: October 11, 2011, 11:37:36 AM »
uto Sales - Gathering Traction!
 

•Auto Sales for the month of Sep’11 exhibited a growth of 20% YoY to 14,016 units from 11,651 units in Sep’10 while sequentially on a MoM basis sales were up by 15.7% as production levels normalized to pre Ramadan levels.
 
•Car Sales in the economy segment (< 1,000cc) witnessed a ~ 48% MoM surge to 3,342 units as PSMC’s production bounced back from the Ramadan effect. Sales in the economy segment were up by 35% YoY. Going forward, PSMC will continue to benefit from the Punjab Taxi Scheme and less competition in the <=1,000cc segment as INDU plans to withdraw its Cuore for a model change.
 
•We believe the 3 listed car manufacturers will not be affected significantly by the recent changes in Auto industry policy, if the policy is enforced properly, as the size of the Pakistan market is quite small at around 150k annual units. This will make it difficult to attract Marquee names like VW, FIAT or so.
 
•Tractor sales came in at 2,222 units, a decline of 54% YoY although up 132% MoM. AGTL’s plant was still shutdown while MTL capitalized and took away its market share. Tractor industry at the moment is bogged down under policy paralysis where the GoP has failed to declare its stance on whether there will be a GST cut or will the current rate stay.
 
IGI Research
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Offline Dhillon

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Re: Auto Sector
« Reply #90 on: October 11, 2011, 02:29:47 PM »
Auto sector - lower interest rates to foster demand   
             
Highlights

            •         Auto sector posted a 30%YoY growth in sales

            •         Small car segment leading the sales

            •         Recommendation - 'Buy' HCAR & INDU

Pakistan Automotive Manufacturers Association (PAMA) has released auto industry's sales figures for Sep-11. In today's Value Seeker, we are presenting an analysis of the auto sales performance during 1QFY12. 

Auto sector posted a 30%YoY growth in sales

Total industry auto sales (Car, LCV & Pickup) surged by 30% YoY to 43,694 units, contributed by 27%YoY increase in car sales to 38,065 units coupled with 54%YoY growth in LCV, Jeeps & Pickups to 5,629 units. However, production posted a nominal growth of 5%YoY to 37,960 units in 1QFY12. The healthy demand from the rural areas remained the key factor which helped the auto sector to grow its sales volume. Amid lack of financing facilities from the financial institutions coupled with rise in prices, the trend suggests strong cash sale and confirms the real demand of autos in the country.

Small car segment leading the sales

With rise in oil & CNG prices, the 800cc segment of the cars posted massive growth of 47%YoY to 13,786 units while the overall weight of 800cc segment in total car sales has improved by 5ppsYoY to 36%. Suzuki Mehran registered a massive growth of 57%YoY to 8,415 units in 1QFY12. However, Coure's was unable to post any significant growth and grew only 13%YoY to 1,282 units.

Under the 1000cc segment (19% share in overall sales), Pak Suzuki was only the company which is enjoying dominance.  Its Alto and Cultus registered a growth of 29%YoY to 3,633 units and 30%YoY to 3,710units respectively.

1300cc+ engine capacity cars which have been dominating car sales for some time now grew only by 13%YoY to 16,936 units during 1QFY12. Honda's Civic and City showed volumetric improvement of 10%YoY and 13%YoY to 1,710 and 2,562 units during the 1QFY12. On the other hand, Indus' Corolla posted only 3%YoY growth to 10,862 units during 1QFY12 while Suzuki Liana and Swift sales increase by massive 114%YoY to 156 units and 171%YoY to 1,826 units respectively.

Recommendation - 'Buy' HCAR & INDU

Current SBP decision to cut the discount rate by 150bps would positively impact the auto sales as car financing will be available at cheaper rates. However, appreciation in JPY against PKR and higher steel prices remains the big risks for the sector. Currently, INDU is trading at FY12 forward PE multiple of 5.6x and offering a dividend yield of 7.7%, we recommend 'Buy' on the scrip with the target price of Rs263/share. We also recommend ‘Buy’ on HCAR with the Dec-11 target price of Rs15/share while recommend ‘Hold’ on PSMC with the target price of Rs77/share

InvestCap


Offline Farzooq

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Re: Auto Sector
« Reply #91 on: November 15, 2011, 10:09:56 AM »

Autos: Steady performance in Oct-11

Auto sales continued to show steady progress with Oct-11 numbers up 8% MoM to 15,107 units. While PSMC continues to lead the way despite slower than expected off-take by Punjab Govt's taxi scheme, Indus benefited from strong Corolla sales.

PSMC sales are up by 13% YoY in Oct; however, sales are lower than expected as the delivery to Punjab Govt's taxi scheme seems still behind its target. The delay in deliveries should show strong run-up in coming months.

We reiterate Buy on both PSMC (PO: PRs94/sh, top-pick in autos) and Indus (PO: 260/sh). We see PSMC's earnings growing by 4x YoY to PRs12.9/sh in 2011E on strong volumes and improving margins.

Indus is also available at attractive FY12E P/E 4.7x and offers 10% D/Y besides 27% upside to our PO. Having said that, we do not rule out near-term pressure weighing on the stock performance as its volumetric performance could remain subdued due to Thai floods factor.

kasb
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Offline M&M

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Re: Auto Sector
« Reply #92 on: December 12, 2011, 02:58:22 PM »
"The only true wisdom is in knowing you know nothing." - Socrates

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Offline M&M

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Re: Auto Sector
« Reply #93 on: December 12, 2011, 07:42:21 PM »
Restoration of ST zero-rating facility on tractors: FBR opposes ministry's proposal
ECC discussing the matter today:geo
subdivision committe made to remove sales tax on tractors:geo
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Offline Farzooq

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Re: Auto Sector
« Reply #94 on: December 12, 2011, 11:11:18 PM »
Auto sales marginally up by 1%YoY in Nov 2011
???? Pakistan Automotive Manufacturers Association (PAMA) has released the auto sales numbers for
November 2011.
???? Auto sales for the month stood at 11,926 units vs. 11,765 units in the same month last year,
marginally growing by 1%YoY.
???? Pak Suzuki (PSMC) registered an impressive growth of 15%YoY on the back of Yellow Cab
scheme offered by the Punjab government. Recall that the government had only approved
PSMC’s Mehran and Bolan for this subsidized scheme. On the other hand, Indus Motor (INDU)
and Honda Car’s (HCAR) sales have declined by 17%YoY each. We attribute increase in prices
by the manufacturers for the decline in their sales.
???? On a MoM basis, auto sales have fallen by 21%. The decline was largely anticipated owing to 1)
consumers delaying their purchases to take advantage of next year’s registration and 2) lesser
working days in the month due to Eid holidays.
???? Hence, during 5MFY12 auto sales have risen by 20%YoY thanks to growth in home remittances
and Punjab government’s Yellow Cab scheme.
???? Looking ahead, we expect auto sales to stand in the vicinity of 172k units in FY12 – a growth of
17% compared to last year.
???? INDU remains our top pick in the sector.

jsgcl
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Offline Farzooq

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Re: Auto Sector
« Reply #95 on: December 13, 2011, 11:16:28 AM »
Auto Sales- Taking a slight breather for the new year!
 

•Auto Sales for the month of Nov’11 exhibited a sequential decline of 21% MoM to 11,924 units from 15,107 units while on a YoY basis they were up 1.4%. Customers, especially in the >1,300cc segment usually delay purchases especially when the calendar year is drawing to a close and this is what has affected sales numbers of HCAR and INDU.
 
•The economy segment (< 1,000cc) car sales witnessed 6% YoY growth to 2,911 units while sequentially it was down 10% as Cuore sales came to a standstill. Recall that INDU plans to phase out Cuore and possibly launch another model.
 
•Tractor sales were recorded at 3.62k units declining by 10.6% MoM. With the Rabi season coming to its peak in Dec11, we will see a gradual tapering of Tractor demand from there onwards until the Kharif season, based on seasonal trend. We maintain our estimates for MTL to record 26k tractor units in FY12 (MTL: EPS PKR 48 FY12).
 
•The Pak Rupee witnessed a 2.8% depreciation from Nov11 till date. Market intel suggests that INDU has already raised its prices on average by 1.5%. Although we might see a small pullback in demand but since this will also price imported cars higher, as currency depreciation works at the same level for imports and domestic manufacturers, we believe through this action margins will be maintained.

IGI Research
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Re: Auto Sector
« Reply #96 on: December 16, 2011, 02:44:06 PM »
Autos: Ban on CNG kits, another risk materializes
 
The ECC has banned imports of CNG kits and cylinders in order to discourage CNG use. Following this, we lower FY12E auto sales forecasts by 20% to 150k-units and downgrade the sector to “Underweight” on higher regulatory risk.
 
PSMC being the largest player in small cars segment should be the worst hit, in our view. We cut PSMC’s 2011-13E EPS estimates by 7%-30%, lower PO to PRs60 and downgrade the stock from Buy to Underperform.
 
We also lower Indus’s FY12-14E EPS estimates by 4%-5% and cut PO from PRs260 to PRs250 though retain our Buy call.
 
This is the worst-case outcome for local automakers though not the best solution to achieve the stated objective, in our view. Levying import duty on equipment and lowering CNG-petrol price gap could have been better alternatives.
 
KASB Securities and Economics Research

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Offline AGz

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Re: Auto Sector
« Reply #97 on: December 19, 2011, 10:05:31 AM »

Al-Ghazi, Millat tractors close down manufacturing units
M RAFIQUE GORAYA

LAHORE: Two main tractor manufacturing units Al-Ghazi Tractors and Millat Tractors have suspended their production after plummeting of their sales as levy of 16 percent GST has made the farm machinery costlier and Zarai Taraqiati Bank Limited has stopped tractor loans to the cash starved farmers for the past two years.

Millat Tractors Limited and Al-Ghazi Tractors Limited account for virtually all of industry's yearly output of more than 72,000 tractors.

A senior executive of Millat Tractors told Business Recorder here on Friday that tractor sales nosed down to 12,000 from July to December 2011 as against 30,000 tractors during corresponding period of last year. The industry sold 70,770 tractors from July 2010 to June 2011, he added.

He said tractor manufacturers have suspended procurement of parts from their vendors as there are already several thousand unsold tractors dumped at their plants and countrywide dealership network. Tractor prices surged by Rs100,000 to Rs. 200,000 a piece depending on engine horse power after imposition of 16 per cent GST in March last year plunging the industry in turmoil and endangering investment of billions of rupees, he added.

He said since ZTBL had suspended credit to farmers for purchase of tractors for two years and high interest rate of commercial banks' loans, tractors are being purchased only by those limited number of affluent growers who pay net cash. He lamented that prices of cotton have suddenly fallen to a new low, farmers are not getting payment of sugarcane produce in cash, on the contrary, prices of fertilisers and other agri-outputs have skyrocketed, therefore the cash deficit small farmers have no money to purchase tractors.

The executive suggested that the Punjab government should provide tractors to the unemployed people instead of taxis as a tractor is economically more useful and employment generator than a car/taxi Pakistan Association of Automotive Parts and Accessories Manufacturers Manufacturing held an emergent meeting here on Friday to review the socio-economic impact of tractor manufacturing units closure in the short and long run as they have stopped buying parts of tractors from the vendors spread all over the country.

Talking to this scribe PAAPAM chairman Nabeel Hashmi said that thousands of auto parts manufacturing units which provide 92 percent parts to the tractor industry are laying off their 0.5 million workers after closure of tractor manufacturing units.

He said imposition of 16 percent General Sales Tax has not only ruined the tractor manufacturing industry but has also had fatal repercussions on the agri economy and engineering and vending industry. Hashmi pointed out that due to decline in tractor sales, the government is not getting any additional revenue, therefore it should immediately withdraw this tax to make cost of tractors affordable for overwhelming majority of small farmers who own less then 12 acres land. PAAPAM chairman warned that as tractors are of prime importance to the agricultural sector itself, the agriculture and rural economy would grossly suffer with dangerous consequences if the government did not take immediate remedial measures.
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Offline Poker Face

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Re: Auto Sector
« Reply #98 on: December 19, 2011, 11:30:07 AM »
our stupid govt and insane policy makers.