Local auto industry continues to grow

ISLAMABAD: The country’s auto industry is likely to post a growth of 68 % in September 2025 supported by stable macroeconomic conditions, improved consumer confidence from stable car prices, and rising auto financing.
According to an analysis of JC Global, it previews automobile sales for Sep-2025, expecting the four major players including Indus Motor Company (INDU), Honda Atlas Cars (HCAR), Pak Suzuki Motor Company and Sazgar Engineering Works (SAZEW) to post a 68% YoY increase to ~15.9k units. The growth is likely to be led by strong volume gains of 82% in HCAR and 80% in Pak Suzuki, while INDU is expected to record a 33% YoY rise. SAZEW also reported a 73% YoY increase in SUV sales during the month. On a MoM basis, volumes are likely to surge 25%. Cumulatively, our sample is expected to post 51% YoY growth in 1QFY26, driven by strong volume gains across all four companies.
HCAR’s volumes are projected to surge 82% YoY to ~2.3k units in Sep-2025, marking the highest monthly sales since Jan-2023. The growth is primarily driven by a 73% increase in sedan sales, company’s key volume contributor (~88%). SUV sales on the other hand, are expected to surge 2.6x YoY to 331 units, largely attributed to the launch of the HR-V e: HEV. On a MoM basis, overall volumes are anticipated to grow 2.2x.
INDU’s volumes are projected to rise by 33% YoY in Sep-2025 to around 3.2k units, driven primarily by strong sedan sales, with Corolla volumes expected to more than double YoY supported by its positioning as the most affordable sedan in its segment, while Yaris sales are likely to increase 44% YoY. Meanwhile, Hilux and Fortuner sales are expected to remain flat YoY. Consequently, Corolla Cross volumes are likely to decline 47% YoY amid intensifying competition in the crossover SUV segment, particularly from Haval Jolion Hybrid, KIA Sportage-L, Hyundai Tucson, and BYD Atto 3. On a MoM basis, INDU’s sales are expected to decline 7%.
We expect auto sector demand to continue growing strongly in FY26, supported by stable macroeconomic conditions, improved consumer confidence from stable car prices, and rising auto financing. To highlight, outstanding auto financing loans increased by 29.4% YoY in Aug-2025 to Rs294bn, the seventh consecutive monthly YoY increase. Furthermore, the additional 40% Regulatory Duty (RD) on commercial imports of used cars, despite the extended age limit from 3 to 5 years, is expected to offer short-term relief to local assemblers. However, with duties set to be reduced by 10% annually until their complete removal by 2029, the local industry will gradually face stronger global competition, which could put pressure on volumes and erode market share in the long-run. Ends