ISLAMABAD: Pakistan’s automotive industry experienced a notable decline in car sales for July 2024, with total units sold dropping by 36% month-on-month (MoM) to 8,589 units, according to data released by the Pakistan Automotive Manufacturers Association (PAMA). Despite this decline, the industry saw a 60% year-on-year (YoY) increase in sales, largely attributed to the low base effect from the previous year’s inventory shortages.
According to Topline Pakistan Research, the sharp MoM decline is primarily due to an increase in tax rates for vehicles, including withholding tax (WHT), introduced in the fiscal year 2025 (FY25) budget. This tax hike prompted consumers to engage in pre-buying during June 2024, pushing car sales to an 18-month high that month.
Among the automakers, Hyundai Nishat Motor witnessed the steepest decline, with sales plunging by 50% MoM to 529 units—a 7% drop compared to July 2023. Indus Motor Company (INDU) also saw a significant reduction in sales, recording 1,664 units sold in July 2024, down 44% MoM. Honda Atlas Cars (HCAR) reported a 15% MoM decrease, with 931 units sold, while Sazgar Engineering (SAZEW) experienced a smaller 5% decline, with 825 units sold.
In contrast to the monthly decline, the YoY growth in car sales for July 2024 is primarily due to the industry’s recovery from last year’s plant closures caused by inventory shortages.
The motorcycle segment also faced a downturn, with Pakistan’s two-wheeler and three-wheeler sales declining by 5% MoM to 84,993 units in July 2024. However, the segment showed a 15% YoY increase. Atlas Honda (ATLH) recorded sales of 70,300 units, reflecting a 12% MoM decline but a 13% YoY growth.
The tractor segment saw a dramatic decline, with Millat Tractors (MTL) and Al Ghazi Tractors (AGTL) experiencing sharp drops in sales. MTL sold 605 units, down 63% YoY and 78% MoM, while AGTL recorded sales of 855 units, down 16% YoY and 40% MoM. The overall tractor industry sales fell by 45% YoY and 65% MoM, totaling 1,460 units. The imposition of a 10% GST on tractor sales in June 2024 also contributed to the pre-buying surge, resulting in the subsequent drop in July.
In a more positive trend, truck and bus sales increased by 3% MoM and 57% YoY, with 307 units sold in July 2024.
As the industry adapts to the new tax environment and recovers from the pre-buying surge, analysts anticipate continued fluctuations in sales figures for the coming months.
