Islamabad: The automotive industry has witnessed a notable surge in sales across major car manufacturers like Honda Atlas Cars (HCAR) and Indus Motors (INDU), driven by favorable economic conditions and strategic pricing adjustments. This upturn follows a period of challenges including supply chain disruptions and regulatory changes impacting the sector.

According to JS Global, the resurgence in auto sales is credited to an improving macroeconomic landscape, facilitated letter of credit openings, reduced supply chain disruptions, and a stable Pakistani Rupee. These factors collectively led to a modest reduction in car prices by approximately 3% compared to last year for both HCAR and Indus Motors. However, regulatory changes such as the Sales Tax Order (SRO) issued in March 2024, which raised the sales tax to 25% for vehicles priced above Rs4 million, have influenced pricing strategies. Both companies adjusted prices on some models to fit within the 18% GST bracket, effectively mitigating the impact of higher tax rates.

HCAR reported a substantial growth in earnings, with a profit after tax of Rs203 million, marking a 40% increase year-over-year, largely due to a significant rise in sales volume. However, the company faced a decline in other income and higher financial charges, impacting its bottom line. Meanwhile, INDU saw strong growth from the introduction of its first hybrid model, the Corolla Cross, which significantly contributed to its total sales volume. Both companies anticipate continued growth, supported by stable macroeconomic conditions and ongoing product innovations.