The domestic automobile industry saw a strong recovery in fiscal year (FY) 2024–25, with growth reportedly reaching triple digits across multiple segments. According to reports, the surge in demand for automobiles comes amid an improvement in Pakistan’s macroeconomic indicators.

 

Data released by the Pakistan Automotive Manufacturers Association indicates that car sales witnessed a staggering 38 percent spike, with 112,203 units sold during FY 2024-25. This number sat at just 81,579 units during FY 2023-24.

 

This surge in demand resulted from a significant drop in interest rates. The year-over-year (YoY) growth in car sales 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 from an extortionate 22 percent to a reasonable 11 percent.

The breakdown of automobile sales suggests that sport utility vehicles (SUVs), pickups, vans, and light commercial vehicles reportedly logged an impressive 61 percent growth in sales. This allowed for sales of these vehicle types in FY 2024-25 to climb from 22,250 units in FY 2023-24 to 33,820 units in FY 2024-25.

Truck sales witnessed a meteoric 103 percent spike, rising to 4,444 units compared to 2,187 units in the corresponding period the year prior. Data from reports suggests that 788 buses were sold in FY 2024-25, allowing bus sales to log a whopping 74 percent YoY growth rate.

According to reports, motorbike and rickshaw sales jumped to a colossal 1.518 million units, translating into a 32 percent jump. In FY 2023-24, this figure sat at just 1.150 million units, indicating a revival of consumer confidence and ultimately, demand for vehicles.

An analyst at a leading Pakistani brokerage house has revealed that car, jeep, pickup and LCV sales managed to climb up to 21,773 units after a 47 percent jump in month-on-month demand. 

Reports credit the increase in general sales tax (GST) on automobiles from 12.5 percent to 18 percent for the sudden uptick in MoM automobile sales growth rate.

However, it merits a mention that not every segment witnessed robust growth rates in sales volume. Tractor sales dipped in FY 2024-25, falling from 45,911 units in the previous fiscal year to just 29,192 units. Reports suggest that a drop in the income generated by farms led to weak rural demand.