Pakistan Auto Sales Surge 41% in FY2025-26

Pakistan’s automobile industry recorded its second consecutive year of expansion during FY2025-26, with overall vehicle sales increasing by 41% to approximately 1.63 million units, supported by lower auto financing rates, relatively stable vehicle prices, and promotional offers that encouraged consumer demand, according to a research report by AKD Securities.

Sales of passenger cars and light commercial vehicles (LCVs) grew 39% year-on-year to 206,445 units, comprising 155,631 passenger cars and 50,814 LCVs and pickup vehicles.

The commercial vehicle segment also posted strong growth. Truck sales surged 67% to 7,439 units, driven by improved transport activity and stricter enforcement of axle-load regulations, while bus sales increased 25% to 985 units.

The two-wheeler market reached a new milestone, with motorcycle sales climbing 31% to a record 1.93 million units. Meanwhile, three-wheeler sales edged up 4% to 41,802 units.

In contrast, the tractor segment recorded a slight decline, with sales falling 1% to 28,791 units, primarily due to higher prices and delays in the implementation of government subsidy programmes.

During June 2026, total industry sales reached 26,823 units, representing an increase of 5% compared to the same month last year and 28% over May 2026.

Combined sales of passenger cars and LCVs rose 4% year-on-year to 22,741 units in June. However, passenger car sales alone declined 13% to 15,378 units, while LCV and pickup sales recorded a significant 73% increase, reaching 7,363 units.

According to the report, the decline in passenger car sales during June reflected a high comparison base, as sales of smaller-engine vehicles had surged during the corresponding period last year ahead of the withdrawal of concessional taxation on vehicles with engine capacities below 850cc.

The report also noted accelerated demand for hybrid and plug-in hybrid electric vehicles (PHEVs) during the month, as buyers advanced their purchases before higher taxes introduced through the FY2026-27 Federal Budget took effect.

Among manufacturers, Pak Suzuki Motor Company retained its position as the country's largest automaker by sales volume, recording 94,848 units, an increase of 30% over the previous year.

Indus Motor Company reported sales of 44,646 units, reflecting 34% growth. Sales of the Corolla, Yaris, and Corolla Cross lineup increased 42% to 35,831 units, while Fortuner and IMV models recorded an 8% increase to 8,815 units.

Honda Atlas Cars posted a 53% rise in sales to 28,015 units. Sales of the Civic and City models climbed 47% to 24,416 units, whereas combined sales of the BR-V and HR-V more than doubled to 3,599 units following the addition of the HR-V.

Sazgar Engineering Works delivered the strongest growth among major manufacturers, with four-wheel vehicle sales increasing 77% to 19,179 units, supported by strong demand for the Haval H6 PHEV, Tank, and other existing models.

Hyundai also recorded positive performance, with annual sales rising 18% to 12,937 units.

By engine category, vehicles with engine capacities above 1,000cc recorded the highest growth, with sales increasing 50% to 80,730 units. Sales of vehicles below 800cc rose 31% to 69,605 units, while the 800cc to 1,000cc segment declined 2% to 4,953 units.

Looking ahead, AKD Securities expects industry sales to expand by a further 20% during FY2026-27, supported by lower financing costs, stable vehicle prices, stronger competition among automakers, and improving macroeconomic conditions. However, the report cautioned that reduced import duties could intensify competition from imported vehicles and place pressure on local manufacturers’ sales and profit margins. It also noted that revised taxation on hybrid and plug-in hybrid vehicles may moderate growth in those categories, although increased competition and potential incentives under the upcoming auto policy could continue supporting overall market demand.