Passenger car sales jump 32% in 11 months
Passenger car sales increased by 32.1% to 94,388 units during the first 11 months of the current fiscal year compared to the same period in the previous year on account of a variety of reasons, including a dramatic fall in interest rates, back-to-back Eid festivities, anticipated price hikes ahead of the federal budget 2025-26, and others.
According to data released by the Pakistan Automotive Manufacturers Association (PAMA), sales of all vehicles, including two-, three-, and four-wheelers, increased; however, sales of farm tractors declined.
Sales of jeeps-cum-pickups rose by 66% to 31,706 units. Sales of trucks and buses increased by 95.7% to 3,776 units and by 73.3% to 719 units, respectively. Sales of motorcycles and rickshaws also surged by 30% to 1,378,131 units.
However, sales of farm tractors fell by a dramatic 36.8% to 26,401 units.
Automobile consultant and expert Shafiq Ahmed Shaikh said it augurs well that, excluding the tractor segment, other parts of the auto sector are gaining momentum as they are on an upward trend. This reflects that the auto industry is growing and regaining strength.
"In my opinion, there are four main reasons. First, the reduction in interest rates — different banks and financial institutions are offering good and affordable instalment schemes. Secondly, owing to information and rumours ahead of the federal budget that vehicle prices will rise, sales have increased. Thirdly, during both Eidul Fitr and Eidul Azha, sales witnessed substantial rises as customers wanted vehicles during the Eid holidays to celebrate in a better way. Finally, credit for the significant rise in vehicle sales also goes to improved law and order, which has supported the industry, along with favourable government measures allowing the industry to flourish.
In my opinion, the auto industry has the potential and capacity to grow. We foresee that the existing industry will face stronger competition from electric vehicles (EVs), as the future will mainly depend on EVs," he said.
Auto sector analyst Mashood Khan said all segments of the automotive industry performed well except for the tractor segment. The motorcycle industry has continuously gained strong momentum throughout the year due to the middle class, which cannot afford expensive four-wheelers. When it comes to the auto industry overall, it has started regaining strength.
Meanwhile, raising concerns about the recently announced federal budget 2025-26, MG Motors Pakistan General Manager (GM) Marketing Division Syed Asif Ahmed said the industry is seeking clarity on the budget.
Hybrid Electric Vehicles (HEVs) enjoy 8.5% GST compared to 18% on EVs. This anomaly has existed for many years, giving HEVs an advantage over EVs.
"Social media has reported an increase in the GST for HEVs from 8.5% to 18%. If true, this will jeopardise the huge investments made by almost all automakers in HEVs. The Finance Bill is silent on the subject, despite the Automotive Industry Development and Export Plan (AIDEP) 2021-26 commitment of no change in tariffs until June 2026. What is needed is for EV GST to be reduced to 8.5% to match HEVs," he said.
He added that used car importers are abusing the gift, baggage, and transfer of residence schemes for commercial trading. Allowing commercial imports of five-year-old used cars with reduced Regulatory Duty (RD) will distort the playing field against local assemblers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 days ago
- Express Tribune
Auto sales plunge 49% post-budget
nalysts are anticipating the automobile sector to keep its pace in the near future owing to improving macroeconomic situation and new production lines introduced by the players. photo: file Listen to article Pakistan's automobile industry experienced a sharp slowdown in July 2025, with sales tumbling 49% month-on-month (MoM) to 11,034 units, according to data from the Pakistan Automotive Manufacturers Association (PAMA). Despite the steep monthly decline, volumes were up 28% year-on-year (YoY) due to a low base in July 2024. Industry experts attribute the MoM slump primarily to the high base of June 2025, when a rush of pre-buying occurred ahead of tax hikes in the FY26 federal budget. The budget introduced an Electric Vehicle (EV) adoption levy and raised the sales tax on 850cc vehicles from 12.5% to 18%, prompting customers to advance purchases before the changes took effect. "The MoM decline is mainly attributed to the high base effect from Jun'25, when sales spiked due to a surge in pre-buying ahead of the increase in vehicle taxes, namely the imposition of the EV adoption levy and the increase in ST on 850cc vehicles from 12.5% to 18% under the FY26 federal budget," wrote AHL Research. The YoY growth is due to a more stable macroeconomic environment with lower interest rates and easing inflation, which has improved consumer sentiment, noted Myesha Sohail of Topline Securities. Breaking down the segments, the 1,300cc and above category saw a 37% MoM decline, with sales dropping to 4,290 units. The 1,000cc segment experienced a 61% MoM decrease, totalling 264 units. Additionally, the below 1,000cc segment recorded a 75% MoM decline, with sales reaching 2,557 units, according to AHL. Among assemblers, Indus Motor Company Ltd (INDU) posted a relatively modest 9% MoM drop to 3,337 units, as gains in Fortuner and Hilux sales (+17% MoM) partly offset declines in Corolla, Yaris, and Corolla Cross (-17% MoM). Pak Suzuki Motor Company Ltd (PSMC) suffered the steepest decline, with volumes shrinking 72% MoM to 3,450 units across all models, led by Alto (-75%) and Wagon R (-84%). Honda Atlas Cars (HCAR) saw sales fall 17% MoM, driven by a 33% slide in Civic/City, though BR-V/HR-V sales surged 3.6 times MoM. In the SUV segment, Sazgar Engineering (SAZEW) recorded a 20% MoM drop to 1,079 units due to weaker Haval demand (-19%). The slowdown was not limited to passenger cars. Two-wheeler sales fell 11% MoM, with Atlas Honda (ATLH) selling 104,276 units (-10%). Three-wheeler volumes plunged 47% MoM, while tractor sales collapsed 57% MoM, with both AGTL (-41%) and MTL (-61%) reporting significant losses. Analysts are anticipating the automobile sector to keep its pace in the near future owing to improving macroeconomic situation and new production lines introduced by the players. "We expect the momentum in auto sales to continue in FY26, supported by lower interest rates and a strong pipeline of new model launches across various engine types, including hybrid and plug-in hybrid," said Sohail.
Business Recorder
3 days ago
- Business Recorder
Launch of new models: car sales in Pakistan jump 28% in July 2025
Pakistan car sales surged 28% on year-on-year (YoY) basis in July 2025, rising to 11,034 units apparently due to launch of a number of new models in recent months and availability of car financing at affordable interest rate. Car sales had stood at 8,589 units a year ago in July 2024, according to Pakistan Automobile Manufacturers Association (PAMA) data. 'The year-on-year growth is due to a more stable macroeconomic environment with lower interest rates and easing inflation which has improved consumer sentiment,' Topline Research's analyst Myesha Sohail said in a commentary. Sohail added, 'we expect the momentum in auto sales to continue in FY26, supported by lower interest rates and a strong pipeline of new model launches across various engine types, including hybrid and plug-in hybrid.' Car sales in Pakistan jump 43% in fiscal year 2024-25 The July sales, however, declined 49% month-on-month (MoM) basis which is 'mainly attributed to the high base effect from Jun'25, when sales spiked due to a surge in pre-buying ahead of the increase in vehicle taxes, namely the imposition of the electric vehicle (EV) adoption levy and the increase in sales tax (ST) on 850cc vehicles from 12.5% to 18% under the FY26 federal budget,' AHL Research's analyst Menka Kirpalani said in another commentary. Company wise sales Indus Motor Company (INDU) recorded a two-fold year-on-year increase in sales to 3,337 units. The growth was led by a 17% MoM rise in the 'Fortuner and IMVs' segment, while demand for Corolla, Yaris, and Cross also remained robust, according to Topline. Hyundai Nishat's sales grew 2.1-time YoY to 1,225 units. 'The Hyundai Porter was the only model to post MoM growth, rising 31%, while the Tucson and Elantra recorded 5-time and 4-time YoY increases, respectively.' Sazgar Engineering (SAZEW) sales rose 31% on YoY basis in the month under review. 'The increase in sales was supported by clarity from the company that budget had no impact on its flagship car Haval prices. Sales were also supported by the launch of the new HAVAL facelift, with further growth expected from August onwards following the introduction of the H6 PHEV variant,' Topline commentary read. Honda Atlas Cars (HCAR) recorded a 61% YoY increase to 1,500 units in July 2025. Pak Suzuki Motor Company (PSMC), however, posted an 18% YoY decline. Two-three wheelers sales Two and three wheeler sales rose 44% YoY in July 2025, rising to 122,441 units. Electric motorcycles and three-wheelers, newly added to the data, accounted for 542 units of the total. 'Road Prince figures are still awaited and could add 2,000 units to the total.' The total tractor industry recorded sales of 1,195 units, down 18% YoY and 57% MoM. 'Tractor sales fell on year-on-year basis due to weak farm economics, in our view,' Sohail said. Truck and bus sales in July 2025 were up 22% YoY while down 49% MoM, reaching 374 units.
Business Recorder
4 days ago
- Business Recorder
Remittances — from lifeline to leverage
Pakistan's remittance inflows in Jul-25 reached $3.21 billion, up 7.4 percent year-on-year, though 5.6 percent lower than June's $3.4 billion due to seasonal normalization after the end-of-fiscal surge. The growth marks a strong start to FY26, following FY25's record $38.3 billion in remittances—a 27 percent increase from the previous year that even exceeded total export earnings. According to the State Bank of Pakistan, Saudi Arabia remained the largest contributor in July with $823.7 million, followed by the UAE at $665.2 million (including $456.8 million from Dubai), the UK at $450.4 million, the EU at $424.4 million, the US at $269.6 million, and other GCC countries including Qatar, Oman, and Kuwait contributing $296 million. This distribution underscores the continued reliance on Gulf-based labour migrants while highlighting steady inflows from Europe and North America, reflecting a diversified base that now includes professionals, students, and freelancers alongside traditional workers. Several factors have supported recent inflows. A crackdown on hundi/hawala networks and money laundering has made formal banking channels more attractive, while a more competitive exchange rate has reduced incentives for informal transfers. Rising income from freelancers and Pakistan-based professionals working remotely for foreign companies has also added to the inflow, offsetting stagnant outward migration as some Gulf states tighten work visa quotas. Despite their importance in shoring up foreign exchange reserves and easing the current account, remittances remain vulnerable to external job markets, oil prices, and host country policies. Heavy reliance on them also risks a 'Dutch Disease' effect—drawing labour into low-productivity sectors like construction, boosting imports, and delaying the structural reforms needed to enhance export competitiveness. Seasonal peaks, such as around Eid or the fiscal year's start, can mask underlying volatility, while shifts in the global economy or slower Gulf growth could quickly put inflows under pressure. This is why policymakers must view the current remittance windfall as a strategic opportunity rather than a permanent cushion. Maintaining the enforcement environment that channels inflows through formal means is necessary, but not sufficient. The real imperative is to channel these funds into productivity-enhancing investments—expanding value-added manufacturing, upgrading skills, and integrating into global supply chains. July's performance is encouraging, but the measure of success will be whether the country can convert this inflow into long-term resilience, reducing dependence on a revenue stream that is ultimately shaped by forces beyond its control. Copyright Business Recorder, 2025
