KARACHI: Pakistan’s automobile sector demonstrated robust growth in the first eleven months of the fiscal year 2024-25, as car sales, motorbikes, and three-wheelers all posted significant gains, reflecting improved economic stability, better consumer confidence, and easing inflationary pressures.
According to data compiled by the Pakistan Automotive Manufacturers Association (PAMA) total car sales in May 2025 reached 14,762 units, marking a 35 percent year-on-year increase and a 39 percent month-on-month growth over April 2025.
The strong month-on-month recovery was largely attributed to a low sales base in April 2025, when road closures in Sindh due to strikes and operational challenges delayed deliveries, suppressing vehicle sales. As these issues eased, demand bounced back sharply in May, boosted further by a comparatively stable macroeconomic environment, lower financing costs, and improved consumer sentiment in anticipation of budget incentives.
In terms of company-wise performance, Sazgar Engineering Works (SAZEW) posted the most remarkable increase, recording a 67 percent month-on-month rise and an 18 percent year-on-year growth. The impressive figures were driven by the April launch of a new facelift model of HAVAL, which gained strong market acceptance. SAZEW’s total sales for 11MFY25 surged by 111 percent to 9,495 units, compared to 4,503 units in the same period last year.
Indus Motor Company (INDU) also delivered a solid performance, with a 2.4 times year-on-year and a 48 percent month-on-month rise in sales to 4,829 units, marking its highest monthly sales in nearly three years. The growth was supported by increased demand for popular models like Corolla, Yaris, and Cross, whose combined sales reached a new 3-year high.
Honda Atlas Cars (HCAR) reported a 69 percent year-on-year and a 17 percent month-on-month increase in sales to 2,005 units, while Pak Suzuki Motor Company (PSMC) saw a mixed result. PSMC posted a 38 percent month-on-month increase but remained down 8 percent compared to the same month last year, with May sales of 5,519 units. Hyundai Nishat Motors registered a healthy 58 percent year-on-year and 45 percent month-on-month rise to 1,307 units in May 2025.
The two- and three-wheeler segment continued its impressive run, with total sales increasing by 26 percent year-on-year and 11 percent month-on-month to 150,175 units in May 2025; the highest monthly sales in three years. This brought cumulative 11MFY25 sales to 1.378 million units, up 30 percent year-on-year, as affordability and essential transport needs sustained demand in this segment.
Pakistan’s tractor industry, however, showed mixed trends. Total tractor sales in May 2025 stood at 2,184 units, representing a 29 percent year-on-year decline but a 36 percent month-on-month increase, as weak farm economics weighed on new purchase decisions. Within this segment, Millat Tractors sold 1,569 units in May 2025, down 34 percent compared to the previous year, while Al-Ghazi Tractors Limited (AGTL) sold 615 units, showing a 17 percent year-on-year decrease.
Meanwhile, Pakistan’s truck and bus segment recorded significant growth, with May 2025 sales rising by 147 percent year-on-year and 17 percent month-on-month to 610 units. Hino, Master, JAC, and Isuzu vehicles all posted increases, taking total 11MFY25 sales to 4,495 units, a 92 percent rise from 2,345 units in the corresponding period of the last fiscal year.
Market analysts attributed this broad-based recovery in the auto sector to easing inflation, lower interest rates, and better financing options, coupled with a stable macroeconomic backdrop. The positive momentum was particularly noticeable in passenger cars and two- and three-wheeler categories, where pent-up demand from previous months converted into actual sales as operational disruptions eased.
Looking ahead, Topline Securities expects the momentum to continue into the next fiscal year, driven by a combination of lower interest rates, improving vehicle financing options, and the introduction of new models equipped with updated engines, including hybrid and plug-in hybrid vehicles. Market watchers believe that as macroeconomic stability improves and consumer affordability rises, automobile sales volumes are likely to sustain their growth trajectory in FY26 as well.
However, auto expert Mashood Khan has warned that the government’s proposed downward trend in Additional Custom Duty, Regulatory Duty, and Custom Duty for easing the import of used vehicles will likely hit local manufacturing instead of increasing exports in the future. He foresees severe consequences for the local manufacturing industry. Without a thriving domestic industry, import bills will surge, and foreign reserves will take a hit, he added. The auto parts and other manufacturing sectors will face significant challenges. It’s unclear how exports will increase without a robust local industry, he added.
Copyright Business Recorder, 2025
