Pakistan’s Automobile Sales Results in 2023

Pakistan’s vehicle sales decreased 63.4% year-on-year to 85,087 units (locally assembled vehicles of PAMA members) in 2023. This was an unprecedentedly low level, lower than the 112,000 units sold in 2009, which was largely affected by the Lehman Shock, and the 128,000 units sold in 2020, which was the negative outcome of the coronavirus pandemic. Against a backdrop of economic deterioration, production decreased significantly due to delays in parts procurement triggered by import restrictions and currency depreciation, and consumers refraining from purchasing due to the uncertain economic outlook.

The decline rate of light commercial vehicles (down 39.5%) was lower than that of passenger cars (down 68.9%). Import regulations have forced automakers to narrow down production models, giving a glimpse of manufacturers’ strategy of prioritizing the production of highly profitable light commercial vehicles, especially SUVs. While Suzuki's light commercial vehicle sales fell below 3,000 units, Hyundai was able to maintain sales a little above 6,000 units. As a result, Hyundai's market share for light commercial vehicles increased by 6.9 points to 25.9%.

Regarding product lineups, Hyundai launched the Santa Fe HEV in October 2023 at a price starting from 12.99 million PKR. In December of the same year, Toyota launched the Corolla Cross HEV at a price starting from 9.41 million PKR. Pakistan is aiming to popularize electric vehicles and is giving preferential treatment through its automobile industry policy Automotive Industry Development and Export Plan 2021-26. The import duty rate for CKD kits of HEVs (up to 20% depending on the item) has been reduced to 4% until the end of June 2026, and the sales tax rate for CBUs (17%) has also been lowered to 8.5% for vehicles under 1,800cc.

In the second half of 2023, there was an upward trend in the total amount of CKD kit imports due to the removal of import restrictions. Sales reached 440 million USD in the second half, the same level as in 2018, compared to 230 million USD in the first half. Supply issues due to parts shortages gradually eased. However, as of December 2023, the inflation rate was 29.7%, the policy interest rate stood at 22%, and the exchange rate of national currency was 283 PKR to the US dollar. So sales recovery is expected to take time.