Latest numbers for the automobile sales for July and August reveal not only that vehicle demand is growing compared to last year, butthat it is increasingly serving a narrower, more affluent segment. Though it is still early days, two months into FY26 show the strongest momentum coming from SUVs and LCVs, in growth terms as well as in the increased share of the market. This shift is not new, but it is more growing more substantive.
The reason for this shift however may probably have less to do with rising incomes and wealth or vehicles becoming more affordable which they haven’t, certainly not relative to incomes, but more to the fact that there are more locally assembled options available that consumers want to take a chance on.
In 2MFY26, the SUV and LCV sales grew 58 percent whereas passenger cars rose 40 percent. The total market pie is not expanding at the same pace as SUVs and LCVs indicating there might be some displacement in demand, where some consumers have moved from sedans to larger vehicles.
At the same time, the share for SUVs and LCVs has grown to 32 percent in 2MFY26, highest in any year yet. Compared to the 10-year best sales, while today’s passenger vehicles are roughly 56 percent lower, SUVs and LCVs are only 2 percent behind.
We know that while demand is slowly recovering in the automobile sector, it is not to the same level as the peak in FY22. But it is also evident now that SUVs and LCVs are much closer to that peak than passenger vehicles.
This is despite the raving continued success and performance of Suzuki Alto, which is ever visible on the roads of Pakistani cities. In FY22—the peak market sales year—Mehran had already exited and Alto had very much taken over. It’s share in the market was about 24 percent (SUV/LCV: 17%).
Suzuki was just ramping up production to meet the growing demand. By FY24, that share reached 33 percent and since then has slowly come down to 26 percent now in FY26. As the most affordable assembled car in the market that costs roughly a third of an average base variant SUV, Alto’s growth is no longer matching larger vehicles or dominating the market.
The mass car segment as we know it is being taken over by higher-end categories. To double down on that, FY26 also marks an important milestone with the first entry of electric cars.
While still small in number, this development could signal the beginning of a shift toward electrification in Pakistan’s auto industry, but legitimizing and adding weight to the SUV/LCV market share. This a deeper and durable change in consumer behavior.
The growing appetite for larger vehiclespoints to a market that is not only recovering but evolving in structure, with luxury and premium segments at the helm of this recovery. The rest of the market is slower to catch up.