KARACHI: Pakistan’s car market closed its strongest fiscal year in recent memory, and buyers raced showrooms before the government could tax them out of the deal. According to the Pakistan Automotive Manufacturer Association-PAMA, sales reached 206,445 units in the FY26 and increased by 39 percent compared to the previous year, whereas 22,741 units were sold in June and increased by 4 percent compared to the same month last year and 29 percent on a month-over-month basis.
Demand Surges Before Budget
Declining inflation rate, fresh round of auto loans, and a slew of new entrants made the annual growth possible. June, though, told a more urgent story: buyers rushed to lock in prices ahead of an expected hike in budget duties and taxes, and manufacturers happily rode the scramble.
No company captured that scramble better than Sazgar Engineering. The firm posted an all-time high of 2,720 units in June, rocketing 102% year-on-year and 70% month-on-month, as deliveries of its Tank model collided with panicked pre-budget buying. Few assemblers in Pakistan’s history have posted growth that steep in a single month.
Pakistan Suzuki told a messier tale. The company recorded sales of 11,543 units in June, which was 13% lower than June last year but was much higher than that of May by 30%, indicating strong demand for the car model that recently hit the market. Honda Atlas Cars recorded its best performance in four years, ending FY26 at 28,015 units. The performance of its City and Civic models increased 52% year-on-year to 2,594 units in June, whereas its BR-V and HR-V models increased by almost 400% to 378 units in June.
Toyota and Hyundai Lag Behind
Not every assembler joined the party. Indus Motor Company fell 5% year-on-year to 3,507 units due to weaker performance in Corolla, Yaris, and Cross, despite an increase in Fortuner and IMV models by 9%. Meanwhile, Hyundai Nishat’s sales dropped 7% on an annual basis to 1,351 units but recorded a 91% increase in Tucson sales and consequently a 50% increase from the previous month, indicating that it too benefited from the budget-related rush.
FY27 Outlook Remains Positive
The frenzy stretched well beyond passenger cars. The number of two-and three-wheelers increased by 29% to 178,508 units in June, resulting in the highest-ever yearly tally of 1.97 million units. There was a massive increase of 39% for trucks and buses on a yearly basis and 43% on a monthly basis to reach 1,023 units, while there was a relatively modest rise of 10% in tractor sales to 3,059 units.
Analysts tracking the sector expect the momentum to carry into FY27, with double-digit growth riding on new variants and fresh brands entering the market. Whether that optimism survives whatever new duties the government eventually settles on is the question every assembler in Pakistan is now watching closely.
