Big automakers halt production in pauper Pakistan as India surges past Japan as 3rd largest auto market


New Delhi/Islamabad: Days after India surpassed Japan to become the third largest auto market, neighbouring Pakistan recorded a steep decline in auto sales with manufacturers forced to shut down production owing to reduced demand and ‘cash flow constraints’.

The Shehbaz Sharif-led country, currently going through a severe economic crisis, so much so, that people have been forced to fight it out for flour on the streets, saw a decline in sales rang ing from 28.4-56.5 per cent in the auto sector during the first half of 2022-23, according to local media reports.


The total car sales across Pakistan stood at 68,900 units in the July-December period compared to 114,774 units sold during the same time frame last year.

Pauper Pakistan

According to a media report, buyers showed reluctance due to high inflation coupled with sky-rocketing interest rates making leasing more expensive.

Moreover, curbs on auto financing and non-opening of letters of credit has resulted in shortage of parts leading to production halts by various assemblers and late delivery in models, the report added.

Big manufacturers almost call it quits

Earlier this months, Suzuki Pakistan announced the extension of closure of its plant till January 13, blaming inventory shortages. “Due to the continued shortage of inventory level, the management of the company has decided to extend the shutdown of the automobile plant from January 9, 2023, to January 13, 2023,” PSMC said.

Looking at the current economic condition and crisis situation, the plant is unlikely to open anytime soon.

On the other hand, Pakistan’s biggest agricultural machinery manufacturer, Millat Tractors Limited has announced that its production will remain closed until further notice, citing reduced demand and cash flow problems.
“Due to continuing reduced demand for tractors and cash flow constraints, the company will remain closed from Friday January 6, 2023 till further notice,” it stated in a regulatory filing.


Over the past few months, several auto part vendors across Pakistan were forced to shut down operations due to massive decline in demand and import curbs imposed by the State Bank of Pakistan (SBP), which were lifted last week.

India’s success story

Despite global recession, India managed to surpass Japan for the first time to become the third largest auto market with New Delhi selling at least 4.25 million new vehicles, against the 4.2 million sold by Japan in 2022.

According to the Society of Indian Automobile Manufacturers (SIAM), new vehicles delivered in India between January and November 2022 totalled 4.13 million. The number rose to roughly 4.25 million units when the sales figure for December, which Maruti Suzuki, the largest automaker in India, reported on 1 January this year, news agency ANI reported.

Japan, on the other hand, sold 4.20 million vehicles last year, down 5.6 per cent from 2021.

(With inputs from agencies)

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