Passenger car sales in Pakistan jumped 43 per cent year-on-year (YoY) in the first quarter of FY27, but unresolved clarity on the auto policy and sales tax is making manufacturers and buyers hesitant to invest, the Pakistan Automotive Manufacturers Association (PAMA) data said on Tuesday.
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.
Passenger car production rose 32 per cent YoY in the quarter. LCVs, jeeps and pickups posted a nominal 1 per cent rise in production, but sales fell a sharp 34 per cent.
Trucks and buses grew 54 per cent in production and 46 per cent in sales on strong domestic demand. Farm tractor sales surged 38 per cent, even as production contracted 15 per cent, while two and three wheelers grew 28 per cent 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 per cent, but sales fell 20 per cent, which PAMA attributed to continuing uncertainty over sales tax. Truck and bus production rose 2.0 per cent and sales 7.0 per cent.
Farm tractor production and sales surged 72 per cent and 73 per cent respectively after the announcement of the Punjab Green Tractor Scheme. Two and three wheelers saw production up 16 per cent and sales up 14 per cent.
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 per cent year-on-year and 3 per cent month-on-month to 4,142 units.
Corolla, Yaris and Cross sales rose 34 per cent to 3,563 units, while Fortuner and IMV sales climbed 16 per cent to 579 units. Honda Atlas Cars sales fell 8 per cent YoY and 19 per cent MoM to 2,128 units.
Pak Suzuki Motor Company sales dropped 46 per cent YoY and 36 per cent MoM to 4,862 units, with Alto down 29 per cent at 3,354 units and Cultus down 68 per cent at 138 units. Hyundai Nishat Motors sales declined 25 per cent YoY but rose 19 per cent MoM to 884 units.
Topline analyst Sania Irfan said the monthly weakness among several assemblers is linked to delivery delays and ongoing consumer caution ahead of policy finalisation.