KARACHI:
Passenger car sales in Pakistan witnessed a significant surge of 44.6%, reaching 67,135 units in the first eight months of the current fiscal year. This growth, compared to the same period last year, is attributed to improved consumer confidence post-COVID-19, the launch of new models, corporate sector purchases, rising prices of used vehicles, and concerns over the longevity of older cars.
Data from the Pakistan Automotive Manufacturers Association (PAMA) indicates an overall increase in vehicle sales, spanning two-wheelers, three-wheelers, and four-wheelers. However, the farm tractor segment remained stagnant, unable to gain momentum due to severe losses incurred by farmers of all scales.
Sales of jeeps and pickups saw a remarkable 69% rise, reaching 22,503 units, while truck and bus sales surged by 96.7% to 2,470 units and by 45% to 435 units, respectively. Additionally, sales of motorcycles and rickshaws climbed 30%, totaling 962,315 units.
Conversely, the farm tractor sector recorded a 30% decline, with sales dropping to 21,692 units. The downturn is linked to inadequate crop pricing, unfavorable weather conditions, and a lack of investment in research and development (R&D) for better seed varieties. Many farmers, burdened by financial losses, are reluctant to cultivate crops.
Automotive analyst Muhammad Sabir Shaikh, speaking to The Express Tribune, outlined several reasons for the rise in car sales. He cited the introduction of new models by multiple automakers, corporate sector demand, and a relatively low interest rate of 12% as key factors. He also highlighted that the high cost and questionable durability of used cars have driven consumers toward purchasing new vehicles. Although buying sentiment has improved post-pandemic, the Pakistani rupee remains weak against the US dollar.
Topline Research analyst Myesha Sohail noted that the positive trend in auto sales is expected to persist as new vehicle variants enter the market and auto financing recovers due to reduced interest rates.
Another industry expert, Mashood Khan, observed that except for the tractor sector, all vehicle segments are experiencing an upward trend, expected to last until June. He emphasized that the federal budget for 2025-2026 will play a crucial role in shaping the auto industryβs future. He urged policymakers to introduce favorable policies that encourage local vehicle production and manufacturing, thereby reducing costs. Currently, individuals earning between Rs100,000 and Rs200,000 per month find it challenging to afford cars and instead opt for motorcycles.
