Press Release

VIS Reaffirms Entity Ratings of Master Changan Motors Limited

Lahore, January 23, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Master Changan Motors Limited (MCML) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long term rating of ‘A-’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Short term rating of ‘A-2’ denotes good certainty of timely payment. Liquidity factors and company fundamentals are sound. Risk factors are small. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 30, 2022.

MCML is principally engaged in the assembly and progressive manufacturing and sale of pickups and vans and passenger cars. The assigned ratings incorporate MCML’s affiliation with experienced and sound sponsors - Changan Automobile Investment (Shenzhen) Corporation Limited (Changan) and Master Motor Corporation (Private) Limited (MMCL). Changan is one of China’s leading state-owned enterprises with international presence, while MMCL is part of well-diversified Master Group of Companies which has presence in mattresses & upholstery, home fashion, textile, chemical, power, automobile and auto part sectors. The company has new automobiles and variants in the pipeline and ongoing capital expenditure is being incurred.
In FY23, Pakistan's auto industry faced significant challenges such as increased policy rates, rupee depreciation, and import restrictions, leading to a significant decrease in automobile production and sales. This decline was due to high vehicle prices and reduced consumer purchasing power. Hike in prices resulted in lower demand and decrease in volumetric and net sales for MCML as well during FY23 and in the ongoing year. The company’s margins and profitability have so far been sustained despite weak economic scenario. While the demand for relatively high margin four wheelers, particularly in Middle to High end segment has decreased, its proportion in total automobile sales has increased during the ongoing year. The recent stabilization of exchange rate may bode well for the auto industry. The ratings remain sensitive to attaining projected sales while sustaining other financial indicators in FY24 and onwards.

For further information on this rating announcement, please contact the undersigned at 042-35723411-12 (8008) or email at

Maimoon Rasheed

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Issue/Issuer Rating Scale

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