Pakistan Automobile Industries

Stability in the auto sector

Aamir Shafaat Khan
May 25, 2026

Consumers have remained upbeat about new vehicles despite the ongoing war between Israel, Iran, and the USA since February 28, 2026, as outstanding auto loans surged for the 17th consecutive month to Rs359.5 billion by the end of April 2026, up from Rs345.34bn in March.

However, this recovery still does not match the peak financing we saw during June 2022 of Rs368bn, when the annual sales volumes were around 240,000 units.

Low interest rates continue to play a pivotal role in luring buyers towards low financing, followed by various packages by assemblers and private banks on affordable car financing. The rest of the demand is propelled by rising petrol prices, forcing people towards various categories of electrified vehicles in larger numbers.

Sales of cars, vans, pickups and sports utility vehicles clocked in at 22,015 units in April 2026, up by 107pc year-on-year (YoY) and 42pc month-on-month, taking 10MFY26 cumulative sales to 166,044 units, up 49pc YoY.

‘Pakistan still has the lowest financing limit and time period in all of Asia, keeping in view the market size and foreign exchange availability’
 
If a global automotive manufacturer introduces a particular car model but the local subsidiary / Importer refuses to introduce the new model in the Pakistan market, within 2 years of its global release, then, a carbon tax of 25% should be levied on that particular model of car, forcing the local subsidiary / importer to introduce the lastest model in pakistan.

The older models give out more carbon emissions and hence, the 25% carbon tax.

Either you introduce the latest model in the market or you loose the market.

Toyota Corolla [ Decade old model ], Honda City [Older generation] and Suzuki Alto [ Older generation] are the targets of such 25 % Carbon tax.

Introduction into the local market means local assembly, not direct import.
 
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Some glimpses of under construction state of the art BYD plant in Gharo Sindh Pakistan .

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