Karachi: In August 2024, the automobile industry in Pakistan experienced stagnant sales numbers, with a total of 11,600 units sold, mirroring the sales from the same period last year. This stagnation is attributed to a significant 33% year-over-year decrease in tractor sales, which dropped to 2,670 units from 3,967 units previously. On the other hand, light commercial vehicles and pickups showed robust growth, increasing sales by 37% year-over-year.

According to AKD Securities Limited, the decline in tractor sales was driven by increased prices resulting from a new 10% sales tax and a drop in agricultural activity, especially noted in the cotton sector. However, there were positive movements in the sales of SAZEW’s HAVAL models, which saw a more than threefold increase compared to last year, and INDU’s Corolla, Yaris, and Cross models, which collectively rose by 40% year-over-year.

On a broader scale, HCAR also reported a significant rise in its sales, with a 70% increase from last year, driven by strong performances in its Civic and City lines. Despite these gains, the industry has not reached the peak sales levels of FY18/19, with the report forecasting a potential 10% increase in passenger car and LCV sales for FY25, contingent on economic improvements and stable car pricing.

The auto sector remains under pressure from new market entrants, posing risks to the market shares of established manufacturers. INDU, with its strong financial position, is highlighted as a preferred stock, with a potential upside of 20% in its June 2025 target price.