Pakistan Auto Sales Surge 46% in First Half of FY26, Despite December Dip
Karachi – Pakistan’s automotive sector demonstrated robust growth in the first half of fiscal year 2026 (FY26), with combined sales of cars, light commercial vehicles (LCVs), pickups, adn vans surging by an extraordinary 46% to 88,322 units. This substantial increase, up from 60,675 units in the same period last year, indicates a strong recovery and rising consumer demand. Tho, December 2025 witnessed a 14% month-on-month (MoM) decline in sales, totaling 13,280 units, despite a positive 35% year-on-year (YoY) comparison.
Key Factors Driving Growth
According to analysts at Topline Securities, the significant yearly growth can be attributed to several converging factors. The entry of new automotive manufacturers into the Pakistani market has increased competition and provided consumers with more choices. Simultaneously, declining interest rates and easing inflationary pressures have improved affordability and purchasing power. A generally improving macroeconomic environment has also bolstered consumer confidence,encouraging investment in durable goods like automobiles.
The MoM sales decline in December is largely explained by a typical year-end effect. Many potential buyers strategically postpone deliveries and new purchases in anticipation of registering their vehicles in the new year, seeking potential tax or regulatory benefits. This pattern is common in the automotive industry and doesn’t necessarily signal a fundamental weakening of demand.
Performance of Major Automakers
Honda Atlas Cars Limited (HACL)
Honda Atlas Cars Limited (HACL) experienced a stellar first half, recording a 75% YoY increase in sales. December sales reached 1,943 units, though this represented a MoM decline. The popularity of Honda City and civic models drove much of this growth, with sales surging 79% YoY to 1,739 units. The BR-V and HR-V models also contributed, with a 46% YoY increase, reaching 204 units.HACL sold 12,039 units during July-December FY26, a substantial 70% increase compared to the same period last fiscal year.
Indus Motor Company (IMC)
Indus Motor Company (IMC),the manufacturer of Toyota vehicles,reported a 40% YoY growth,achieving 2,312 units in sales. The combined sales of Toyota Corolla, Yaris, and Cross models saw a significant 83% yoy increase but declined 35% MoM to 2,116 units. Though,sales of Fortuner and IMV models experienced a considerable downturn,falling 61% YoY and 67% MoM to 196 units. Despite this setback in certain segments, IMC’s overall sales increased by 64% to 20,563 units in IHFY26.
Hyundai Nishat Motors (HNM)
Hyundai Nishat Motors (HNM) maintained positive momentum, reporting an 11% YoY growth and a 2% MoM increase.This performance was largely driven by strong demand for the Sonata and Elantra models, which saw a remarkable 105% and 52% YoY increase, respectively. HNM’s total sales for IHFY26 reached 6,716 units,a 58% increase compared to the previous year.
Sazgar Engineering Works Limited (SEWL)
Sazgar Engineering Works Limited (SEWL) demonstrated consistent growth, with December 2025 sales reaching 1,165 units, a 5% MoM increase. Total sales for July–December FY26 rose to 7,210 units, representing a substantial 72% increase.
Pak Suzuki Motor Company Limited (PSMCL)
Pak Suzuki Motor Company Limited (PSMCL) experienced modest growth, with a 9% YoY increase to 6,531 units. This growth was significantly propelled by a remarkable twelvefold increase in sales of the Every model and a 51% increase in Swift sales, reaching 1,330 and 1,009 units, respectively. PSMCL sold 40,380 units in IHFY26,a 27% increase compared to the previous year.
Two and Three-Wheeler Segment
The two and three-wheeler sector also witnessed impressive growth, with sales rising 36% YoY to 160,408 units in December, bringing IHFY26 sales to 923,759 units, a 33% YoY increase.Atlas Honda dominated this segment, selling 790,978 units in IHFY26, a 35% YoY increase, and achieved an all-time high monthly sale of 143,091 units in December.
Other Vehicle Categories
While passenger car sales thrived, the tractor segment faced challenges, with a sharp 52% YoY and 7% MoM decline in december, resulting in IHFY26 sales falling 26% to 12,929 units.Conversely, truck and bus sales surged by 93% YoY but experienced a 30% MoM decline to 372 units. Total truck and bus sales in IHFY26 reached 3,531 units, a substantial 96% YoY increase.
Industry Outlook and Expert opinion
Auto sector expert Mashood Ali Khan noted that 2025 presented challenges in the form of policy instability and the impact of used car imports. However, he emphasized that proactive government measures have played a crucial role in fostering a positive environment for the automotive industry. These measures, aimed at stabilizing the economy and promoting local manufacturing, are expected to sustain the growth momentum in the coming months.
Key Takeaways
- Pakistan’s auto sales saw a significant 46% increase in the first half of FY26.
- New market entrants, lower interest rates, and easing inflation are driving growth.
- December sales experienced a typical MoM decline due to year-end effects.
- honda and Toyota continue to be market leaders, with Hyundai showing strong growth.
- The two and three-wheeler segment remains a key driver of overall industry performance.
