CORPORATE WINDOW: Auto sales under war clouds

As wars are being fought in the Middle East, auto assemblers are seeing varied responses from consumers in Pakistan. Some assemblers and their dealers appear a bit cautious about the intensity of the ongoing US-Iran-Israel war, as they have been witnessing a slowdown in showroom footfall.

An assembler of Korean automobiles said buyers’ order intake has reduced, but it cannot be said this is purely because of the war, since car purchasing usually remains thin in the early days of Ramazan and then picks up in the second half of the holy month, targeting pre-Eid buying.

He said he cannot give the exact drop in showroom buyers, but “I can say that this war has definitely shattered buying sentiments.” Some dealers also say that consumers have adopted a wait-and-see attitude amid the Middle East conflict, as uncertainty has gripped the market.

However, a Punjab-based assembler of Japanese cars, while responding to the sales outlook under the current uncertain business environment, said, “No big impact, things are normal.” Similarly, a banker in auto financing simply said, “Everything is ok,” citing no impact from the ongoing war on the auto market.

Demand for small, petrol-driven cars and their financing may rise further owing to fuel price hikes amid forecasts of further increases

Demand for small, petrol-driven cars and their financing may rise further owing to fuel price hikes amid forecasts of further increases

Another assembler said that demand for small, petrol-driven cars and their financing may further rise owing to a massive Rs55-per-litre increase in petrol prices and amid forecasts of further price increases. The locally assembled Suzuki Alto 660cc, which is already in high demand, may turn out to be a main beneficiary, along with some 1,000cc cars, in the future.

On May 10, 2025, Pakistan and India agreed to a ceasefire after four days of intense fighting. This brief war with the neighbour also did not pose any serious threat to the auto sector as sales during May 2025 stood at 14,762 units, reflecting a 35 per cent year-on-year (YoY) and 39pc month-on-month (MoM) rise.

The 12-day June 2025 Iran-Israel war also did not have much consequence on sales of cars, sports utility vehicles (SUVs), pickups and vans, which remained brisk. Auto sales in June 2025 clocked in at 21,773 units, posting a 64pc YoY and 47pc MoM jump.

The Pakistan-Afghanistan war, which started ahead of Ramazan and is still........

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