ISLAMABAD: Car sales have gained momentum, reaching 30,625 units in the first four months of the current fiscal year—a 46.7% rise compared to the same period last year. This growth is attributed to improved economic conditions and a steady decrease in interest rates.
According to the latest data from the Pakistan Automotive Manufacturers Association (PAMA), sales of trucks and buses rose by 82% to 1,074 units and 66.4% to 203 units, respectively. Jeep and pick-up sales also grew by 60%, hitting 10,068 units, while sales of two- and three-wheelers (motorbikes and rickshaws) rose 23.4% to 457,880 units.
In contrast, tractor sales dropped significantly by 59.9% to 6,939 units, despite the country’s substantial rural and agrarian economy.
Mashood Khan, former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), noted that passenger car, truck, bus, jeep, and motorcycle sales have surged over the last four months, except for farm tractors.
The tractor industry, however, faces challenges due to policy shifts in the 2024-2025 federal budget, but the government is actively addressing issues like sales tax to support the sector. “We’re hopeful that the sector’s performance will gradually improve in the next quarter,” Khan said.
The auto industry’s overall state is improving, largely due to the State Bank of Pakistan’s gradual reduction in interest rates, which has bolstered customer and investor confidence. Car leasing is expected to rebound, with some Original Equipment Manufacturers (OEMs) introducing interest-free financing options, which have already shown promising results.
The local market has considerable growth potential. Compared to 2023—a challenging year marked by high interest rates, economic difficulties, and political instability—this year reflects marked improvement.
At a recent auto show in Lahore, a variety of electric vehicles (EVs) were showcased, sparking interest among upper and upper-middle-class consumers. However, Khan noted that EVs are still financially out of reach for much of the middle class.
Khan expressed cautious optimism about industry targets, saying, “While the economy is improving, it’s unlikely we’ll meet the target of selling 250,000 units by June 2025, but we aim to reach about 125,000 units.” Topline Research’s recent report on car sales attributes this growth to improved auto financing and a more optimistic market sentiment. As interest rates continue to fall and new models, especially hybrid electric vehicles (HEVs) and EVs, enter the market, auto sales are expected to rise further.
