Auto sales rebound on small cars, hybrids

Pakistan's automobile sector rebounded strongly in August 2025, with total car sales reaching 14,050 units, reflecting a 27-28% month-on-month (MoM) increase and a 61-62% year-on-year (YoY) jump, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

This brought cumulative sales for the first two months of FY26 to 25,093 units, up 45% YoY compared to 17,288 units in the same period last year.

The rebound followed a steep drop in July sales, which had fallen to a seven-month low of 11,000 units due to a surge in pre-buying in June ahead of vehicle tax hikes. Analysts noted that August's recovery was supported by the low base effect, lower interest rates, easing inflation, and the launch of new models such as the Haval PHEV and Honda HR-V Hybrid.

"Despite floods, the MoM increase in sales during Aug'25 is primarily due to the low base effect, as sales in Jul'25 had declined sharply following a surge in pre-buying ahead of the vehicle tax hike in Jun'25," noted AHL Auto Analyst Menka Kirpalani.

Growth was most pronounced in the small car category, where sales of vehicles below 1000cc surged 79% MoM to 4,569 units, led by the Suzuki Alto. The 1000cc segment doubled to 519 units, while cars above 1300cc rose 15% MoM to 4,928 units.

"Notably, growth was led by an 80% surge in sales volume of models with horsepower of up to 1000cc," mentioned KTrade.

Company-wise, Pak Suzuki Motor Company (PSMC) posted the sharpest recovery, with sales climbing 96% MoM and 107% YoY to 7,154 units, as Swift, Cultus, Alto, Ravi, and Every all posted double-digit growth. Suzuki Swift volumes alone jumped 182% MoM, while Cultus rose 108% and Alto 80%.

In contrast, Wagon R sales dipped 12% MoM. Indus Motor Company (INDU), the local assembler of Toyota, recorded a more modest 2% MoM increase to 3,400 units, though sales were still 60% higher YoY. Corolla, Yaris, and Corolla Cross sales rose 6% MoM, while Fortuner and Hilux fell 8%. Honda Atlas Cars (HCAR) reported a 28% MoM decline to 1,073 units, reflecting a 39% drop in Civic and City sales, although its BR-V and HR-V lines received a boost from the introduction of hybrid models. Hyundai Nishat sold 1,212 units, up 83% YoY but slightly down on a MoM basis, while Sazgar Engineering (SAZEW) sold 1,049 units, down 3% MoM but up 110% YoY, benefiting from its diversified line-up including Haval SUVs and BAIC models.

Beyond passenger cars, the broader auto market also saw gains. Two-wheeler sales rose 19% MoM and 42% YoY to 148,063 units in August, led by Atlas Honda (ATLH), which sold 126,529 units, up 21% MoM. Three-wheeler volumes climbed 33% MoM to 2,067 units, with SAZEW reporting a 46% rise in sales. By contrast, tractor sales weakened, falling 17% MoM to 996 units, as Millat Tractors posted a 22% decline and AGTL slipped 2%, with analysts pointing to rural stress and flood-related disruptions as key drags. In the commercial segment, truck and bus sales grew 23% MoM and 47% YoY to 770 units, reflecting stronger demand in logistics and transport.

Production also outpaced sales, with PAMA data showing car output more than doubling to 22,446 units in July–August FY26, compared to 11,171 units last year. Suzuki Alto led the surge with production up 220% YoY to 11,046 units. However, analysts caution that production growth may not be sustainable, as high vehicle prices, costly auto financing, and currency volatility continue to suppress demand.