Pakistan’s local car manufacturers are facing growing competition from the influx of Chinese car imports. This competition is expected to escalate, especially after the U.S. implemented reciprocal tariffs on China. According to AKD Securities, the entry of Chinese electric vehicle (EV) manufacturers could further pressure local companies in the market.
In March 2025, total auto industry sales reached 13,100 units, marking an 8% decrease compared to last year. The drop was largely due to a 67% decline in tractor sales, which fell to 13,500 units. However, passenger car sales rose by 17% to reach 11,313 units. This increase was driven by a remarkable 67% surge in truck sales, which hit 13,531 units.
Local manufacturer INDUS reported sales of 3,100 units in March, an increase of 8% year-on-year. This growth was mainly due to higher sales of popular models like the Fortuner. Additionally, automotive companies such as Toyota are expanding their offerings in Pakistan to stay competitive against new entrants like Changan, which features models including the Changan Eado EV.
Despite the positive growth in certain areas, AKD Securities warns that imported EVs could slow local sales growth. The Chinese government’s support for EVs and its interest in setting up production plants in Pakistan pose a significant challenge. As competition intensifies, it is crucial for the government to protect local manufacturers and ensure their continued viability in the industry.