KARACHI: Passenger car sales in Pakistan jumped 57 per cent year-on-year (YoY) in January 2026, reflecting a continued recovery in consumer demand amid relative macroeconomic stability, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).
Total passenger car sales stood at 18,602 units in January 2026, compared to 11,883 units in January 2025. On a month-on-month (MoM) basis, sales increased 74 per cent from 10,671 units in December 2025.
For the first seven months of FY26 (July-January), passenger car sales reached 84,512 units, marking a 45 per cent increase over 58,385 units sold in the same period last year.Auto sector expert Mashood Ali Khan said Pakistan’s auto industry has shown a clear turnaround after two years of stagnation, with data from the past seven months indicating a sustained recovery. “The numbers clearly point to a positive trend. Compared to last year, the industry has regained momentum, largely due to easing economic pressures and improved financing conditions,” he said.
Khan noted that the State Bank of Pakistan’s reduction in interest rates has played a critical role in reviving demand. “Financing is the lifeline of this industry. If interest rates move into single digits, the market has the potential to touch 250,000 units next year,” he said, adding that allied industries have also contributed to improved purchasing power.
For the current fiscal year ending June 2026, Khan projected total industry volumes in the range of 180,000 to 190,000 units, reflecting steady growth but still below historical peaks. Sales of 1,300 cc and above vehicles rose sharply to 9,763 units in January 2026, up 77 per cent from 5,518 units in January 2025. Cumulative sales in this category climbed 74 per cent to 45,167 units during July-January FY26.
In the 1,000cc segment, sales increased to 495 units, posting a 31 per cent decline from 717 units a year earlier. However, cumulative sales of this category were recorded at 3,016 units from 3,006 units last year.
Cars below 1,000cc remained the backbone of the market, with January sales surging to 8,306 units, showing a 47 per cent increase from 5,633 units last year. Cumulative sales in this segment stood at 36,152 units, up 24 per cent YoY.
In the electric vehicle segment, Dewan’s Honri-Ve witnessed sales of only 38 units against 15 years sold in January last year. Sales of jeeps and pickups dropped to 4,453 units in January 2026, registering a 13 per cent decrease from 5,127 units in January 2025. Cumulative sales reached 26,865 units.
The truck and bus segment showed mixed performance. Total truck and bus sales were recorded at 1,101 units, up 77 per cent compared to 621 units last year. Cumulative sales reached to 4,633 units against 2,419 units sold during the same month last year.
Tractor sales dropped to 2,205 units in January, compared with 2,761 units sold during the same month last year. Motorcycles and three-wheelers continued their strong momentum, with sales increasing to 181,790 units in January 2026, up 30 per cent from 139,161 units in the same month last year. Cumulative sales rose 32 per cent to 1.103 million units.
Industry observers note that while demand recovery remains broad-based, sustainability will depend on interest rates, upcoming fiscal measures, and exchange rate stability.Commenting on segment-wise performance, Mashood Ali Khan said Suzuki continues to dominate the small-car segment, with compact models selling rapidly due to affordability and strong brand trust. “These vehicles remain the first choice for urban buyers,” he said.
The SUV segment, he added, has become increasingly competitive. “Japanese, Korean and Chinese brands are all aggressively competing for market share, making this one of the most dynamic segments right now.”
Khan highlighted strong momentum in the motorcycle market, particularly for Honda. “Two-wheelers cater to the masses, and Honda is on track to break its previous sales records this year,” he said.
However, he expressed caution over the trucks and buses segment. “Although there is a slight recovery, volumes remain below potential. Without a meaningful pickup in construction and infrastructure activity, growth will stay limited,” he said, noting the segment’s potential stands at 15,000 to 20,000 units annually.
The tractor industry remains under pressure, Khan said, blaming inconsistent government policies. “This sector can easily reach 50,000 to 60,000 units annually, but only if there is a stable, long-term agricultural policy instead of short-term schemes,” he added.
Looking ahead, Khan stressed the importance of historical benchmarks. “The industry crossed 230,000 units in 2017-18 and again in 2021-22. While the current trend is encouraging, crossing the 200,000-unit mark again will be the real signal of full recovery,” he said.
He concluded that sustainable growth hinges on policy consistency. “A coherent industrialisation policy focused on localisation and SME development is essential. Without long-term clarity, the auto sector will continue to underperform its true potential.”
Myesha Sohail, an analyst at Topline Research, said they expect positive momentum in auto sales to continue in 2026, supported by lower interest rates and new hybrid and plug-in hybrid models. Additionally, easing inflation and improved economic activity should further strengthen demand in the coming months.
