Pakistan car sales up 67% on back of lower interest rates

Pakistan car sales increased by 67% year-on-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, 17,174 units were sold in September, reflecting a 67% increase from September 2024. The number of units sold in September was 22% more than the 14,050 units sold in August.

The continued momentum in automobile sales was largely due to the stable macroeconomic environment, which allowed the State Bank to lower interest rates, making cheaper financing available to customers to purchase new vehicles.

According to State Bank data, auto financing rebounded in FY25, rising to PKR 277 billion from PKR 225 billion in FY24.

Myesha Sohail, an analyst at Topline Securities, said the introduction of more variants, easing inflation, and improving consumer sentiment contributed to increased sales.

In the first quarter of fiscal year 2026 (July-September), 42,267 units were sold, reflecting a 53% year-on-year rise from 27,585 units in the same period last year.

According to the data, Pakistan Suzuki Motor Company (PSMC) and Honda saw the biggest jump in their sales year on year, with 79% and 82% respectively.

PSMC sold 8,995 units in September, compared to 5,013 in the same period last month. Meanwhile, Honda sold 2,307 units, up from 1,269 last year.

The sales of Suzuki were bolstered by Cultus, which saw a 624% increase year-on-year — from 59 units in September 2024 to 427 units this year.

For Honda, the sales of City and Civic models rose 73% year-on-year to 1,977 units, while that of BRV and HRV models rose 2.6% to 330 units in September.

Sazgar Engineering reported a 73% year-on-year growth, Hyundai Nishat 56% and Indus Motor Company (INDU) 33%.

Two- and three-wheeler sales

The sales of auto rickshaws and motorbikes increased by 21% year-on-year and 7% month-on-month to 158,941 units in September. This takes 1QFY26 sales to 431,542, a 35% year-on-year rise.

The sales of PSMC increased 41% year-on-year and 11% month on month to 2,899 units, while Atlas Honda’s sales increased 23% and 7% respectively to 135,603 units. This was the company’s highest ever monthly sales, according to Topline Securities.

Topline Securities said sales are expected to increase further in FY26 due to lower interest rates and the expected arrival of new models to be launched by companies across different engines i.e., Hybrid, Plugin Hybrid, etc.

Auto rickshaw sales

The sale of autorickshaws declined 14% year-on-year and 10% month-on-month to 1,864 units.

The demand for tractors remained subdued as sales dropped 27% year-on-year and 21% month-on-month to 790 units in September, mainly due to floods and weak farm economics.

The sales of tractor have remained low for the past year, hitting a 22-year low between July 2024 and June 2025.

The sales in FY25 fell to 29,192 units, reflecting the poor financial condition of farmers as wheat prices fell from Rs3,373 per 40kg in June 2024 to Rs2,603 per 40kg in June this year.

During FY26, Topline Securities expects tractor sales to increase by 16% to 34,000 units as a result of the 20,000-unit tractor scheme launched by the Punjab government.

The production of 2,077 units during September suggests underlying demand from the tractor scheme, indicating a potential rebound in sales in the coming months, Topline Securities added.

The sales of truck and bus surged 2.6% year-on-year and 24% month-on-month 824 units in September, marking an 88-month high.