Pakistan’s local car producers are facing increased competition from the rising imports of Chinese cars, which is expected to intensify further after the implementation of reciprocal tariffs by US President Donald Trump on China. The arrival of Chinese EV manufacturers is expected to put additional pressure on local manufacturers, AKD Securities said in a recent note.
Total auto industry sales reached 13100 units in March 2025, a decrease of 8% YoY, mainly due to a 67% YoY decline in tractor sales, which dropped to 13500 units.
Passenger car sales grew by 17% in March 2025, reaching 11,313 units, primarily driven by a 67% increase in truck sales, which surged to 13,531 units. However, the report highlights that the entry of Chinese EVs may threaten local car sales. As the country experiences a surge in imported Chinese EVs, the competition for market share between local manufacturers and international suppliers is expected to intensify.
INDU reported total sales of 3,100 units, an 8% increase YoY in March. The increase is mainly attributed to higher sales of the Fortuner and IMV models, which have recently benefited from incentives, including new pricing. Other models, such as the Corolla, Yaris, and Cross, were reported at 3,278 units, up 15% YoY.
Changan entered Pakistan with several new models, including electric vehicles like the Changan Eado EV. In response, automakers such as Toyota have been forced to ramp up their offerings for the Pakistani market. With increased competition in the market, the goal for Changan is to capture a larger share by targeting the EV segment, which is seeing an uptick due to rising government support for electric vehicles.
EVs and hybrid vehicles are expected to perform well given the governmental incentives for the production and adoption of these energy-efficient models.
Import of EVs may curb local sales growth
AKD Securities said that with the implementation of reciprocal tariffs, local car producers are facing increased competition from Chinese imports. The arrival of Chinese EV manufacturers, such as BYD, is expected to put more pressure on local manufacturers.
This is particularly pertinent as the Chinese government has lifted tariffs on electric vehicle imports and has shown interest in setting up manufacturing plants in Pakistan.
The report added that a reduction in car prices will result in reduced sales for CRC/HRC mills and could impact prices of cars, as observed in the past when rising raw material costs increased demand for imported Chinese car models. However, the government should consider additional support for local manufacturers as new Chinese OEMs enter the market.
While Chinese car manufacturers have shown strong interest in entering Pakistan, the government’s policies need to protect local production.
