KARACHI, (TW News): Pakistan’s passenger car sales surged by 57 per cent year-on-year to 18,602 units in January, signalling a strong recovery in the country’s auto industry.

During the first seven months of FY26 (July–January), total passenger car sales reached 84,512 units, reflecting a 45 per cent increase compared to 58,385 units sold in the corresponding period last year.

Auto sector expert Mashood Ali Khan said the industry has demonstrated a clear turnaround after nearly two years of stagnation, with recent data pointing to sustained recovery.

“The numbers indicate a strong positive trend. Compared to last year, the industry has regained momentum, largely driven by easing economic pressures and improved financing conditions,” he said.

Khan highlighted that the State Bank of Pakistan’s reduction in interest rates has played a pivotal role in reviving consumer demand.

“Financing is the lifeline of this industry. If interest rates fall into single digits, the market has the potential to reach 250,000 units next year,” he noted, adding that improved purchasing power in allied industries has further supported demand.

For the fiscal year ending June 2026, Khan projected total industry volumes between 180,000 and 190,000 units — indicating steady growth, though still below historical peaks.

Industry observers caution that while the recovery appears broad-based, its sustainability will depend on interest rate trends, fiscal policy measures, and exchange rate stability.

Commenting on segment-wise performance, Khan said Suzuki continues to dominate the small-car segment, with compact models witnessing strong demand due to affordability and brand reliability.

“These vehicles remain the first choice for urban consumers,” he said.

The SUV segment, meanwhile, has become increasingly competitive.

“Japanese, Korean and Chinese brands are aggressively competing for market share, making this one of the most dynamic segments in the market,” he added.

The motorcycle sector is also witnessing strong momentum, particularly for Honda.

“Two-wheelers cater to the mass market, and Honda is on track to surpass its previous sales records this year,” Khan said.

However, he expressed caution regarding the trucks and buses segment.

“Although there is some recovery, volumes remain below potential. Without a meaningful revival in construction and infrastructure activity, growth in this segment will remain constrained,” he observed, noting its annual potential stands at 15,000 to 20,000 units.

The tractor industry continues to face challenges, primarily due to inconsistent government policies.

“This sector has the capacity to reach 50,000 to 60,000 units annually, but that requires a stable, long-term agricultural policy rather than short-term schemes,” Khan added.

Looking ahead, Khan stressed the importance of measuring progress against historical benchmarks.

“The industry crossed 230,000 units in 2017-18 and again in 2021-22. While the current recovery is encouraging, surpassing the 200,000-unit mark will be the real indicator of a full rebound,” he said.

He concluded that sustained growth will depend on policy consistency.

“A coherent industrialisation policy focused on localisation and SME development is essential. Without long-term clarity and stability, the auto sector will continue to operate below its true potential.”