Pakistan's Automobile Market Forecast for 2023

Pakistan's automobile market (sales of locally assembled vehicles by PAMA-member manufacturers) in 2022 is expected to decrease by 9.4% from the previous year to around 220,000 units. The market in 2021 saw a sharp recovery following the corona lockdown in the previous year. The rebound was also aided by the reduction of the federal excise tax on automobiles and the sales tax reform on small vehicles starting from July. In 2022, although the first half of 2022 benefited from the same tax cut, sales stalled from the second half when the tax cut ended.

The automobile market in 2023 is expected to decline to around 160,000 units. The main reasons are the continued import restrictions on CKD parts and the possibility that demand has been eaten up by the tax cuts implemented until June 2022. In addition, there are concerns about the deterioration of the economic environment, including exchange rates and inflation.