Pakistan's auto sales jump 107% in April as lower financing costs drive demand

Pakistan’s auto sector sustained strong growth momentum in April 2026, with passenger car and light commercial vehicle (LCV) sales surging more than 100% year-on-year as lower financing rates, stable vehicle prices and improving economic conditions continued to support consumer demand, according to AKD Research, citing data from Pakistan Automotive Manufacturers Association.

Passenger car and LCV sales rose 107% year-on-year to 22,000 units during April, led mainly by strong growth in entry-level vehicles.

AKD Research attributed the increase to lower financing rates, stable car prices, improving household incomes and financing and discount offers introduced by original equipment manufacturers (OEMs).

On a cumulative basis, passenger car and LCV sales reached 166,000 units during the first 10 months of FY2025-26, compared to 111,500 units in the same period last year, showing growth of 49%.

The report stated that recovery in the mid-sized sedan segment supported sales growth at Indus Motor Company (INDU), where total volumetric sales increased 33% year-on-year to 4,330 units in April.

Sales of Corolla, Yaris and Corolla Cross models rose 37% to 3,451 units, driven largely by demand for Yaris sedans.

Meanwhile, sales of Fortuner and other IMV vehicles increased 18% year-on-year to 879 units, supported by discount offers on Fortuner models.

Honda Atlas Cars (HCAR) also recorded strong growth during the month, with total sales increasing 59% year-on-year.

Sales of City and Civic models rose 55% to 2,432 units as lower financing rates continued supporting sedan demand.

The report added that BR-V and HR-V sales surged 2.1 times compared to last year to 284 units, reflecting rising demand in the crossover vehicle category.

Sazgar Engineering Works (SAZEW) recorded the highest growth among four-wheel vehicle manufacturers, with sales increasing 305% year-on-year to 2,225 units during April.

AKD Research attributed the increase primarily to rising demand for Haval H6 plug-in hybrid electric vehicles (PHEVs) and inclusion of Tank500 vehicles in the company’s lineup.

On the two-wheeler side, motorcycle sales reached a record 187,700 units in April, up 41% from a year earlier.

Atlas Honda Limited (ATLH) posted its highest-ever monthly motorcycle sales at 163,000 units during the month.

The report also showed strong recovery in commercial and agricultural vehicle segments.

Tractor sales rose 76% year-on-year to 2,824 units, mainly due to distribution under Phase-III of Punjab government’s Green Tractor Scheme.

Truck and bus sales increased 58% to 824 units, supported by improving transport activity amid economic recovery and stricter axle-load enforcement measures.

AKD Research stated that it expected growth in the auto sector to continue into FY2026-27, projecting overall sector growth of around 20%.

According to the brokerage house, the outlook is supported by lower financing costs, stable vehicle prices amid rising competition and improving macroeconomic conditions.

However, AKD Research warned that prolonged tensions in the Middle East remained a downside risk for the sector, particularly due to rising sea freight costs and fuel prices linked to geopolitical uncertainty.

The report stated that higher freight charges could slightly affect gross margins of automakers in the short term, while elevated fuel prices may accelerate adoption of hybrid and new energy vehicles.

The research firm added that any reduction in taxes and duties on plug-in hybrid electric vehicles under the upcoming auto policy could further strengthen demand for hybrid vehicles.