Pakistan auto sales jump 39% in FY26 as pre-budget buying lifts June demand

Pakistan's automobile sales surged 39% in fiscal year 2025-26 to 206,445 units, marking a strong recovery for the industry as improving consumer demand, expanding auto financing and new model launches boosted purchases, analysts said.

The momentum extended into June, when vehicle sales rose 4% from a year earlier and 29% from May to 22,741 units, supported by pre-budget buying as consumers rushed to purchase vehicles ahead of higher taxes and duties announced in the federal budget.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA), FY26 sales reached 206,445 units, compared with 148,436 units a year earlier.

Pre-budget buying fuels June rebound

Analysts at Topline Securities said June's month-over-month increase reflected strong pre-budget demand as buyers accelerated purchases ahead of anticipated tax increases.

The brokerage said the industry's recovery was also supported by new product launches, including hybrid and crossover models, along with stronger auto financing as inflation eased during much of the fiscal year.

Intermarket Securities said June's sharp monthly rebound was partly due to a low base in May, when Eid holidays disrupted sales, while consumers also advanced purchases before a higher general sales tax (GST) on hybrid vehicles took effect in July.

Passenger car sales fell 13% from a year earlier to about 15,000 units. However, a 79% increase in light commercial vehicle and pickup sales more than offset the decline, Intermarket Securities said.

Sazgar posts record monthly sales

Sazgar Engineering Works (SAZEW) posted its highest-ever monthly sales in June, with deliveries rising 102% from a year earlier and 70% from May to 2,720 units, according to Topline Securities.

The brokerage attributed the record performance to strong pre-budget demand and robust deliveries of the company's Tank SUV.

Intermarket Securities said Sazgar's market share expanded to 12% during the month. The company also stopped reporting Tank 500 sales separately, limiting visibility into individual model sales.

Suzuki remains market leader

Pakistan Suzuki Motor Company (PSMC) sold 11,543 vehicles in June, down 13% from a year earlier but up 30% from May.

Analysts said the recently launched Fronx crossover continued to attract strong demand, with 1,717 units sold during the month.

Despite the year-over-year decline, Suzuki remained Pakistan's largest automaker by sales volume.

Honda records highest annual sales in four years

Honda Atlas Cars (HCAR) sold 2,972 vehicles in June, up 64% from a year earlier and 33% from May.

Sales of the City and Civic increased 52% to 2,594 units, while BR-V and HR-V sales nearly quadrupled to 378 units.

Honda's cumulative FY26 sales reached 28,015 units, the highest level in four years, reflecting robust demand across both its sedan and SUV lineup.

Intermarket Securities said Honda maintained a market share of about 13% during June.

Indus loses market share despite higher annual sales

Indus Motor Company (INDU) sold 3,507 vehicles in June, down 5% from a year earlier and largely unchanged from May.

Sales of Corolla, Yaris and Corolla Cross models declined 9% to 2,650 units, while Fortuner and Hilux Revo sales increased 9% to 857 units.

Intermarket Securities said Indus Motor's FY26 sales rose 34% to around 45,000 units but trailed overall industry growth, resulting in market share losses as competition intensified.

Two-wheelers, tractors and trucks maintain strong momentum

Motorcycle and three-wheeler sales rose 29% from a year earlier and 4% from May to 178,508 units in June.

For FY26, combined two- and three-wheeler sales reached a record 1.97 million units, up 30% from the previous fiscal year.

Tractor sales increased 10% from a year earlier and 17% from May to 3,059 units, while truck and bus sales climbed 39% year over year and 43% month over month to 1,023 units.

Intermarket Securities said tractor demand continued to normalize as the temporary boost from the Punjab Tractor Scheme faded, although volumes remained healthy.

The brokerage added that truck sales remained strong, supported by robust demand, with Ghandhara Industries (GHNI) posting particularly strong growth.

Higher taxes may temper FY27 demand

Despite the industry's strong recovery in FY26, analysts cautioned that higher taxes and changing trade policies could slow demand in the coming fiscal year.

Intermarket Securities said the GST rate on hybrid vehicles increased to 25% in July from the earlier preferential rates of 8.5% and 12.75%, which could dampen demand following the pre-budget buying seen in June.

The brokerage also noted that customs duties on completely built-up (CBU) vehicle imports were reduced, while duties on completely knocked-down (CKD) kits remained unchanged, potentially increasing competitive pressure on local assemblers.

Nevertheless, Topline Securities expects the industry's recovery to continue in FY27, forecasting double-digit sales growth supported by new model launches, expanding auto financing and the entry of additional automotive brands into the Pakistani market.