Pakistan auto sales up 62% on back of lower interest rates

Pakistan car sales increased by 62% in August compared to the same month last year on the back of lower interest rates, which encouraged consumers to buy vehicles on bank loans.

According to data released by the Pakistan Automotive Manufacturers Association, the total units sold in August stood at 14,050, reflecting a 62% increase from August 2024. The number of units sold in August was 27% more than the 11,043 units sold in June.

Analysts said the growth in car sales was a reflection of the stable macroeconomic environment and was spurred by lower interest rates, which made cheaper financing available to consumers. According to State Bank data, auto financing rebounded in FY25, rising to PKR 277 billion from PKR 225 billion in FY24.

Hussain Haider, a research analyst at IMS Securities, said auto sales posted robust year-on-year growth in August due to improved macroeconomic conditions, which remain a key driver for further sector recovery.

However, the proposed rationalization of auto sector tariffs through 2030 and the increase in the age limit on used car imports to five years are expected to add uncertainty to the outlook, Haider added.

The month-on-month increase was driven primarily by higher sales of Pak Suzuki Motor Company. The company posted the highest growth among all car manufacturers, with year-on-year sales rising 96% and month-on-month 94%.

The sale of Alto surged 107% year-on-year with 4,193 units sold in August. The month-on-month increase of 80% largely reflects a low base as June sales were pulled forward ahead of the GST hike effective July 1.

Hyundai Nishat recorded 83% year-on-year growth to 1,212 in August, driven mainly by strong Tucson and Elantra sales. The month-on-month numbers declined 1%.

Indus Motor Company posted a 60% year-on-year and 2% month-on-month growth to 3,400 units. Honda Atlas Cars (HCAR) saw a decline of 7% year-on-year and 28% month-on-month.

Sazgar Engineering (SAZEW) reported a 10% year-on-year increase but a 3% month-on-month fall to 1,049 units, which included sales of the newly launched HAVAL H6 PHEV variant in August.

Two- and three-wheeler sales

The sales of motorcycles and rickshaws increased by 42% year-on-year and 19% month-on-month to 148,063 units in August.

The sale of tractors increased 63% year-on-year to 996 units, but month-on-month sales declined 17%.

Myesha Sohail of Topline Security said the dip in sales was likely due to damages caused to the rural economy by floods.

However, she added the positive momentum of auto sales is likely to continue in FY26 due to lower interest rates and pipeline of new models to be launched by companies across different engines — hybrid, plugin hybrid, etc.