Pakistan’s automobile market experienced significant growth in January 2025, with car sales soaring by 61% year-on-year (YoY) to 139,161 units—marking the highest level in two and a half years. This remarkable surge was fueled by lower interest rates, rising consumer confidence, and the launch of new vehicle models.
According to Topline Securities, car sales for the month reached 17,010 units, reflecting a 73% month-on-month (MoM) jump compared to December 2024.
The rise in sales followed the State Bank of Pakistan’s (SBP) decision to lower its benchmark interest rate by 100 basis points to 12% in December 2024, after a series of reductions from a peak of 22% in June 2024. This decline in interest rates made auto financing more affordable, increasing vehicle accessibility for consumers.
The YoY surge in car sales was attributed to reduced borrowing costs, improved buyer sentiment, and the introduction of fresh vehicle models. “The increase in sales is primarily due to lower interest rates, enhanced consumer confidence, and the availability of new variants,” the report highlighted.
The MoM rise was largely influenced by the “low base effect,” as car sales in December usually dip due to registration delays for the new year. Additionally, the absence of SAZEW data in December 2024 also contributed to the difference.
During the first seven months of the financial year 2025 (7MFY25), total car sales rose to 77,686 units—a 55% increase from the 49,989 units recorded in the same period of the previous fiscal year (7MFY24).
The report further noted that all major automobile manufacturers reported growth in both YoY and MoM sales. Additionally, sales of two and three-wheelers climbed by 33% YoY and 18% MoM, reaching a total of 139,161 units—the highest since mid-2022.
However, the tractor segment experienced a downturn, with sales dropping by 28% YoY and 61% MoM to 2,761 units. On the other hand, truck and bus sales exhibited significant growth, surging 2.57 times YoY and 3.22 times MoM, reaching 621 units—the highest since January 2022.
Looking ahead, the report anticipates continued expansion in the automotive sector, supported by recovering auto financing, further reductions in interest rates, and the introduction of new vehicle models in the market.
