By Staff Reporter
KARACHI: Pakistan’s auto market accelerated in August, with car sales soaring 62% year-on-year, fueled by improved consumer confidence and easier access to bank financing, industry data showed on Thursday.
The upswing offers hope for a sector battered by economic challenges, though analysts warn that policy missteps could stall the recovery.
Sales of cars, including light commercial vehicles, vans, and jeeps, climbed to 14,050 units last month from 8,699 units a year earlier and 11,034 units in July, according to the Pakistan Automotive Manufacturers Association (PAMA).
Truck sales also revved up, surging 140% to 596 units from 249 units in August 2024, PAMA data showed. Two- and three-wheeler sales, including motorbikes and rickshaws, jumped 42% to 148,063 units.
Tractor sales, however, skidded 63% to 996 units from 2,670 units a year ago, reflecting ongoing struggles in the agriculture sector.
“Businesses are growing, and the purchasing power of people has improved recently,” said Muhammad Sabir Shaikh, an auto sector analyst. He credited a wave of leasing programs from commercial and Islamic banks for driving demand.
Shaikh noted that used imported cars, expected to hit the market in the coming months, will likely intensify competition in the sector.
On the tractor sales decline, Shaikh said farmers have been “distraught” for three years, grappling with poor crop yields, rising input costs, and weak output prices. “They are unable to purchase new tractors or unwilling to make new investments in the agriculture sector,” he said.
The auto sector’s momentum extended into the first two months of fiscal 2026, with car sales rising 45% to 25,093 units from 17,288 units a year earlier, said Mashood Khan, another industry expert.
“This augurs well that the local auto industry is gaining slowly, but a single negative decision by the government can take the industry back two or three years,” Khan warned. He urged policymakers to bolster local manufacturers and parts suppliers to compete with imported used cars, adding, “Earning rests on the survival of the local industry.”
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