OUR STAFF REPORTER LAHORE - Auto sales have increased by 9 percent 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 percent. 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 percent YoY. During this period, Pak Suzuki (PSMC) sales surged by 67 percent YoY, while Indus Motors (INDU) witnessed an increase of 6 percent YoY. Going forward, demand to somewhat weakened in September owing to Eid holidays and floods in southern parts of the country. INDUs sales rose the most in August by 27 percent YoY followed by Honda Cars (HCAR) growth of 22 percent YoY, while PSMC sales declined by 3 percent YoY. However, on a MoM basis, overall sales declined by 31 percent. This fall is led by a high base in the previous month of July. To recall, July sales had risen by 134 percent MoM owing to tax advantage arising from removal ~3.5 percent of taxes effective from July 01, 2011. Interestingly, demand in August is 7 percent lower than its 6-month trailing average. Cumulative auto sales in 2MFY12 stood at 29,680 units, rising by 35 percentYoY. Pak Suzuki maintained its market leader status with a share of 62 percent, followed by INDUs share of 30 percent and HCARs share of 8 percent Going forward analysts expect the demand to remain somewhat weak in September owing to Eid holidays and floods in southern part of the country. However, floods may again lead to windfall gains to farmers owing to higher crop prices, which consequently should boost demand for automobiles in 2H of the year. Moreover, the Yellow cab scheme announced by the Punjab government should further add to numbers in FY12. Analysts presently expect auto sales to stand in the vicinity of 165k units in FY12, up 13 percent from the previous year.