By Staff Reporter
KARACHI: Pakistan’s auto industry posted robust growth in October, with passenger vehicle sales jumping 32% from a year earlier amid lower interest rates and improving consumer confidence, though a surge in used-car imports is raising alarms about the sector’s long-term viability.
Sales of cars, vans, pickups and sport utility vehicles climbed to 17,333 units last month, up 1% from September, according to data compiled by local brokerage Topline Securities. The year-on-year increase reflects a stabilising macroeconomic environment, the introduction of new variants, lower interest rates, easing inflation and improving consumer sentiment, Myesha Sohail, an analyst at Topline, said in a note.
Month-on-month sales were largely flat, dragged down by an 18% decline in volumes at Pakistan Suzuki Motor Co. amid a company-wide reset. The discontinuation of models such as Ravi, Bolan, Every VX and Wagon R contributed to month-on-month declines of 17% in Swift, 84% in Ravi and 28% in Every. Bolan, meanwhile, has seen no sales since May 2025.
For the first four months of fiscal 2026, cumulative sales rose 46% to 59,600 units from 40,693 a year ago. Indus Motor Co., which assembles Toyota models, led the pack with a 44% month-on-month gain to 4,529 units. Sales of Corolla, Yaris and Cross models collectively advanced 41% from September and 78% year-on-year to 3,742 units, while Fortuner and IMVs surged 58% month-on-month and 83% year-on-year to 787 units. Indus Motor’s four-month tally reached 14,418 units, up 66% from the prior year.
Hyundai Nishat Motor Pvt. notched the strongest year-on-year growth at 82% to 1,086 units, fueled by demand for Tucson and Elantra models, though sales slipped 8% from September. July-October volumes totaled 4,698 units, an 81% increase.
Honda Atlas Cars Ltd. saw sales rise 72% year-on-year and 13% month-on-month to 2,247 units, driven by City and Civic models. Four-month sales jumped 54% to 7,487 units.
Pakistan Suzuki’s October volumes fell 18% from September to 7,403 units, mainly on weakness in Swift, Ravi and Every, though they edged up 1% year-on-year. Four-month sales increased 33% to 27,234 units.
Beyond passenger vehicles, sales of two- and three-wheelers advanced 20% year-on-year and 4% month-on-month to 165,500 units, approaching a four-year high. Four-month volumes climbed 30% to 597,000 units. Atlas Honda Ltd. set a monthly record with 140,178 CD70 motorcycles sold, topping its September 2025 mark.
Tractor sales leaped 67% year-on-year and 265% month-on-month to 2,886 units, boosted by the Punjab Green Tractor Scheme, but four-month volumes dropped 15% to 5,867 units. Truck and bus sales more than doubled with a 118% year-on-year gain to 766 units, though they dipped 7% from September. Four-month sales rose 106% to 2,630 units.
Sohail expects the positive momentum to persist through fiscal 2026, supported by lower interest rates and new model launches across conventional, hybrid and plug-in hybrid engines. Yet the domestic industry is growing increasingly wary of a flood of imported used vehicles, which threaten to undermine local manufacturing, jobs and fiscal compliance.
Data from the Engineering Development Board and industry associations show the market share of imported used cars has more than doubled to 20% in 2025 from an average of 7.5% between 2020 and 2023.
The Pakistan Association of Automotive Parts & Accessories Manufacturers estimates local vendors are losing between 48 billion rupees ($173 million) and 60 billion rupees annually from reduced demand for domestically produced components.
Industry officials warn that without policy changes, this share could swell to 50%, meaning one in every two cars sold in Pakistan would be a used import — sidelining assembly lines and eroding production capacity. The influx is jolting the local auto-parts sector, which underpins much of the country’s manufacturing. Each imported vehicle displaces about Rs1.5 million in domestic parts, leading to idle capacity, financial pressures and potential shutdowns among small and medium-sized enterprises.
The toll on employment is mounting, with the auto-parts industry directly hiring around 300,000 workers and supporting two million more indirectly — the largest in any manufacturing sub-sector. “With every used vehicle that enters the country, many blue-collar jobs are effectively lost,” an industry official said. Misuse of import schemes — including “gift,” “baggage” and “transfer of residence” — has facilitated under-invoicing, mis-declaration and tax evasion. Authorities are concerned that some payments flow through hawala and hundi networks, spurring capital flight and complicating compliance with bodies like the Financial Action Task Force.
The government’s addition of a 40% regulatory duty on commercial used-car imports, set to phase out to zero by 2028-2029, is expected to open another channel for large-scale inflows, experts said. Recent efforts to consolidate schemes into a single, monitored framework to limit abuse were not approved.
“We must decide whether Pakistan wants to remain a dumping ground for second-hand vehicles or build a robust, self-reliant auto manufacturing base,” a senior office holder of PAAPAM said, adding, “The government’s vision to increase local manufacturing cannot succeed if such large-scale displacement of domestic value addition continues unchecked.”
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