Auto Sales Jump Pakistan as Cheaper Financing Fuels Buying Boom
Auto Sales Jump Pakistan as cheaper loans encourage buyers to return to showrooms. Lower interest rates and steady economic conditions have revived consumer confidence. As a result, the auto sector shows strong signs of recovery.
Industry experts expect earnings to grow 21% year on year in FY2026’s second quarter.
According to Optimus Capital, sector profits may reach Rs6.6 billion. This growth follows a sharp 76% rise in vehicle sales volumes.
Rising Sales, Thinner Margins
Car sales climbed to 17,833 units during the quarter. However, rising costs reduced some of the financial gains. Distribution expenses jumped 188%, while secondary income fell 25%.
As a result, net margins dropped by two percentage points. They now stand at 6.9%, despite strong sales momentum. Therefore, companies face pressure to control operating costs.
Competition Reshapes the Market
Passenger cars now lead volumes among PAMA members. According to analysts, competition has intensified across segments.
SUVs and light commercial vehicles face heavy pressure from new entrants.
New energy vehicles continue to attract attention with advanced features.
Brands like Jaecoo and BYD plan fresh launches soon.
Consequently, buyers now enjoy more choices and better technology. Honda Atlas Cars emerged as a clear winner this quarter.
HR-V and BR-V sales jumped 141%, driven by hybrid demand. Honda’s profit may rise 152% to Rs1.4 billion.
Interest Rates Drive the Outlook
Indus Motor faced pressure in the premium SUV space. Fortuner and Corolla Cross lost market share due to competition.
However, Indus may still post Rs5.1 billion profit and declare dividends.
Interest rates fell from 24% to 11% over recent months.
Experts expect single digit rates within six months. Therefore, Auto Sales Jump Pakistan could continue. Japanese brands retain an edge due to higher localisation.
Meanwhile, Korean and Chinese brands may face price pressure after June 2026.
In addition, lower electricity tariffs could improve long term competitiveness.
