Car sales jump 43% in first quarter of FY27 despite uncertainty over auto policy

Home latest pakistan world sports showbiz entertainment Royal business health Sci-Tech Food Fact Check Sci-Tech Videos shows Watch –> Business Car sales jump 43% in first quarter of FY27 despite uncertainty over auto policy Pakistan Automotive Manufacturers Association warns policy uncertainty weighing on investment decisions By Shahid Shah | Published October 14, 2026

Passenger car sales in Pakistan rose 43% year-on-year in the first quarter of FY2026-27, but uncertainty over the auto policy and sales tax continues to weigh on investment decisions by manufacturers and buyers, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

PAMA Director General Raziur Rahman stated that July-September figures point to a resurgence of customer interest in member companies’ products. Barring light commercial vehicles (LCVs), jeeps and pickups, all categories rebounded, helped by easing inflation and an improving macroeconomic environment, The News reported on Wednesday.

Passenger car production rose 32% YoY in the quarter. LCVs, jeeps and pickups posted a nominal 1$ rise in production, but sales fell a sharp 34%. Trucks and buses grew 54% in production and 46% in sales on strong domestic demand. Farm tractor sales surged 38%, even as production contracted 15%, while two- and three-wheelers grew 28% in both production and sales.

PAMA said the recovery is tempered by “perceptible hesitation” among market players, with the lack of policy clarity dominating sentiment. The industry has drawn confidence from an October 7 Senate committee meeting, where Haroon Akhtar Khan, adviser to the prime minister on industries and production, assured members that the policy will be approved within two weeks. PAMA said it now expects a fair taxation regime in that time frame, warning that a tariff structure unattractive to long-term investors will signal preparation for ‘Nationalisation 2.0’.

Month-on-month (MoM) indicators were mixed. Passenger car production rose 28%, but sales fell 20%, which PAMA attributed to continuing uncertainty over sales tax. Truck and bus production rose 2.0% and sales 7.0%. Farm tractor production and sales surged 72% and 73% respectively after the announcement of the Punjab Green Tractor Scheme. Two- and three-wheelers saw production up 16% and sales up 14%.

PAMA also flagged a surge in imports amid the policy vacuum. It said imports of completely built units (CBUs) appeared to have been brought forward in anticipation of the policy, alongside a steep rise in used car imports, with 2,276 units arriving in September alone. Both trends, it warned, will add pressure on the balance of payments, could force the State Bank of Pakistan to take corrective action, and would hurt the value addition sector needlessly.

The association welcomed the stance of Dr Rubina Ather, a member of the Tariff Policy Board, who opposed additional customs duties on tyres and some motorcycle parts. Company-wise data compiled by Topline Research showed a divergent picture among carmakers. Indus Motor Company was the only assembler to record growth in September, with sales up 31% year-on-year and 3% month-on-month to 4,142 units. Corolla, Yaris and Cross sales rose 34% to 3,563 units, while Fortuner and IMV sales climbed 16% to 579 units.

Honda Atlas Cars sales fell 8% YoY and 19% MoM to 2,128 units. Pak Suzuki Motor Company sales dropped 46% YoY and 36% MoM to 4,862 units, with Alto down 29% at 3,354 units and Cultus down 68% at 138 units. Hyundai Nishat Motors sales declined 25% YoY but rose 19% MoM to 884 units.

Topline analyst Sania Irfan said the monthly weakness among several assemblers is linked to delayed clarity on the sales tax policy for hybrid and plug-in hybrid vehicles, which restricted invoicing by companies. Two- and three-wheeler sales hit a record 202,502 units in September, up 27% YoY, while tractor sales rose 2.3 times year-on-year to 1,815 units and truck and bus sales grew 13% to 933 units.

Looking ahead, Irfan said Topline expected positive momentum in auto sales in FY27, with double-digit growth supported by new variants and the entry of new brands.