Automobile sales in May 2025 recorded meteoric Year-on-year (YoY) and Month-on-month growth rates of 35 percent and 39 percent, respectively. According to reports, a staggering 14,762 units of automobiles were sold nationwide.

 

These automobiles include cars, vans, pickups and sport utility vehicles. Adding May’s figures to the tally indicates that consumers have purchased a whopping 126,226 units during fiscal year (FY) 2024-25, excluding June 2025.

 

Automobile sales in the first 11 months of FY 2024-25 have logged a 39 percent increase when compared to the same period of the previous year. Data from the Pakistan Automotive Manufacturers Association (PAMA) suggests that automobile sales in the corresponding period during the previous fiscal year sat at a conservative 90,545 units.

 

The YoY growth can be attributed to lower inflation and interest rates, which have made purchasing cars more affordable. Inflation rates have fallen to single digits while interest rates have declined to a reasonable 12 percent.

 

While analysts have outlined how a fall in interest rates could increase car sales volumes in the coming months, the federal government has been considering a hike in sales tax on vehicles with engine capacities of up to 850cc, a move which could potentially offset the boost in affordability from lower rates. 

 

The increase in MoM sales can be linked to the base rate effect as automobile sales in April 2025 remained subdued. As per reports, the primary reason behind lower sales in April lies in strikes carried out in Sindh over canal issues. Reports reveal that the strikes resulted in road closures, causing a fall in sales volume and a delay in the delivery of automobiles.

 

Leading the pack, Pak Suzuki Motor Company Ltd (PSMCL) managed to clear a respectable 5,519 units in May. Indus Motor Company (IMC) trailed close behind, selling 4,828 units during the same month.

 

Sales figures for May spell a resounding achievement for IMC as YoY sales volumes witnessed a staggering 136 percent growth. IMC’s MoM sales grew by 48 percent, allowing the company to reportedly hit their highest monthly sales in approximately three years.

 

Reports reveal that bus and truck sales remained robust too, recording a whopping 147 percent increase on a YoY basis. However, not all automobile types witnessed a growth in their sales volumes as tractor sales fell by 29 percent on a YoY basis.

 

As per reports, the slump in tractor sales can be associated with “weak farm economics”. Analysts are likely to closely track car sales for June 2025 to compare the growth in absolute sales volumes for FY 2024–25 with previous years.