Business Recorder
KARACHI: Pakistan’s automobile sector is expected to post stronger-than-earlier anticipated earnings amid a faster recovery in vehicle sales, improving financing trends and growing demand for new models, according to a latest research report issued by Topline Research on Thursday. In its report, Topline Research revised upward earnings estimates for major automobile assemblers, particularly Sazgar Engineering Works (SAZEW) and Honda Atlas Cars Pakistan (HCAR), while slightly trimming estimates for Indus Motor Company (INDU) despite stable sales expectations. According to the author, Myesha Sohail, revisions in earnings estimates are primarily driven by stronger-than-expected volumetric growth in Pakistan’s auto sector along with changes in gross margin assumptions amid improving industry dynamics. It expects Pakistan’s passenger car market — including Pakistan Automotive Manufacturers Association (PAMA) members, non-PAMA assemblers and imported used vehicles — to reach around 295,000 to 300,000 units in FY26, reflecting a sharp 43 percent increase from FY25 levels, followed by an additional 10 percent growth in FY27. This marks a major upward revision from the earlier expectation of 248,000 units for FY26 and 280,000 units for FY27. The report noted that industry sales growth has significantly exceeded expectations, supported by rising auto financing, improving purchasing power, and stronger consumer demand. The report attributed the stronger outlook to a broad-based cyclical recovery across original equipment manufacturers (OEMs), expansion of auto financing, entry of new brands such as Jaecoo, and scaling-up by existing players including Haval. “Despite the upward revision in volumes, the overall industry size is still expected to remain below FY18 peak levels, indicating a gradual but faster-than-expected recovery path,” Myesha Sohail noted in the report, adding that Pakistan’s automobile market is now expected to surpass its historic sales peak in FY27 rather than FY28, as previously estimated. For company-specific outlooks, Topline revised upward sales assumptions for Sazgar Engineering and Honda Atlas due to stronger-than-anticipated demand for new vehicle launches, while maintaining relatively stable volume expectations for Indus Motor Company. Sazgar Engineering emerged as one of the strongest performers in the report, with Topline revising upward its volumetric sales assumptions by 20-32 percent for FY26-28 on the back of stronger-than-expected sales of Haval vehicles and encouraging market response to the newly launched Tank model. The report also referred to media reports indicating that Sazgar may launch additional models including the Tank 300, Haval Raptor and Cannon Alpha in 2026, although these have not yet been incorporated into forecasts due to the absence of formal confirmation from management. Analysts believe the latest upward revision in earnings expectations signals growing confidence in Pakistan’s automobile sector, which has staged a stronger-than-expected rebound after years of contraction caused by import restrictions, high financing costs and economic uncertainty. Rising consumer demand, expanding financing availability and new model launches are increasingly positioning the sector for sustained recovery, though policy continuity remains a key factor for long-term growth. Copyright Business Recorder, 2026
Go to News Site