For the third consecutive month, sales of passenger automobiles in Pakistan hovered around a pitiful 5,000 units per month, indicating that the country’s auto industry woes are far from over. If such a dismal sales average persists, hardly around 70,000 vehicles are expected to be sold during this fiscal year, which will be the lowest-ever figure for the industry since its inception— even lower than the pandemic year 2020.
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There are several reasons behind the downfall of the automotive industry in Pakistan such as insufficient localization. rising input costs, overall inflation, declining demand due to a plunging economy, currency depreciation, and the imposition of high taxes on the purchase of new vehicles.
Although there is no direct comparison between Pakistan and India, the number of cars sold in a month here is achieved in around 10 hours across the border. With an ongoing sales average of around 3.6 lac cars a month, according to India’s Federation of Automobile Dealers Association (FADA) data, over 500 cars are sold per hour cumulatively across India. This means around 12,000 cars a day.
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Yes, Pakistan’s market is modest in comparison to India, but it isn’t that insignificant when you realize that Pakistan is the world’s 5th most populous country. The current sales average of around 5,000 vehicles should be at least 6 times higher than it is. We are well behind countries like Malaysia, Indonesia, and Thailand in terms of automotive production, which is terrible for a country of our size and capability.
Pakistan is finding it extremely difficult to stay up with the rapidly evolving South Asian automobile scene. In fact, it is nowhere in the picture either. Although manufacturers have expressed optimism that the market will recover in 2024 and that the post-election environment will propel the sector to 350,000 units in the next two years and up to 500,000 units by 2030, but it’s really more of a sheer fantasy and a prime illustration of the wait and see, do nothing attitude.
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Moreover, it is anticipated that the impending devaluation of the currency will lead to an additional increase in car prices, so further negatively impacting the sales of locally assembled cars in Pakistan. Unless stern measures are taken to uplift the sector, the auto industry will continue to struggle with depleting sales while putting a big question mark on the survival of most players.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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