Vehicles in Pakistan: Over Half of All Households Own Motorcycles in 2019

Private vehicle ownership in Pakistan has risen sharply over the last 4 years. More than 9% of households now own cars, up from 6% in 2015. Motorcycle ownership has jumped from 41% of households in 2015 to 53% now, according to data released by Federal Bureau of Statistics (FBS) recently. There are 32.2 million households in Pakistan, according to 2017 Census.

Vehicle Ownership in Pakistan. Source: PBS

Total number of vehicles registered in Pakistan increased 9.6% to 23,588,268 in 2018, up from 21,506,641 vehicles in 2017. Of all the vehicle categories, motorcycles saw the biggest increase of 11.5% reaching 17,465,880. Cars, jeeps and station wagons rose 5.3% reaching 3,043,593. Trucks surged to 277,416 and buses to 236,461, according to Pakistan Today.

Pakistan is now the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycle sales in Pakistan have both been soaring at rates of over 20% a year until recently.

Motorcycle ownership data is yet another confirmation of the fact that the majority of the households in Pakistan now belong to the middle class, a first in Pakistan's history. This was first reported in 2015 research done by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL).

It's an important tipping point that puts Pakistan among the top 5 countries with fastest growing middle class population in Asia-Pacific region, according to an Asian Development Bank report titled Asia's Emerging Middle Class: Past, Present, And Future. The ADB report put Pakistan's middle class growth from 1990 to 2008 at 36.5%, much faster than India's 12.5% growth in the same period.


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Pakistan Economy: Car Sales Up 72%; Cement Shipments Rise 16.89%

Pakistan auto industry is booming. Toyota, Suzuki and Honda factories are working around the clock in the southern port city of Karachi and eastern city of Lahore -- yet customers can still wait for up to four months for new vehicles to be delivered, according to media reports. At the same time, increased construction activity is visible everywhere in the country.

Local car sales, excluding imported cars, jumped to 54,812 units in the first three months (Jul-Sep) of fiscal year 2016, up 72% from 31,899 units in the same period of last year, according to data released by the Pakistan Automotive Manufacturers Association (PAMA).

Pak Suzuki led the pack with 33,770 units followed by Indus Motors (Toyota) 14,767 cars and Honda Motors 6,184 units. Industry analysts at Topline Securities expect local car sales to reach 203,653 units during the current fiscal year.

Car sales (excluding imported ones) in Pakistan grew at a five-year (FY11-15) compound annual growth rate (CAGR) of just 5.3% to 179,953 units. While volumes surged by 31% in fiscal year 2015 (FY15) on the back of the new model of Toyota Corolla, Punjab taxi scheme and an increase in car financing due to 42-year low interest rates in the country also helped, according to Express Tribune newspaper. “We forecast local car sales to grow at 13% in FY16 to reach 203,653 units,” Topline Securities reported on Monday.

In addition to car sales, domestic cement sales have also jumped by a phenomenal 16.89% to 4.29 million tons during July and August 2015 from 3.67 million tons shipped in the same period last year.

Car sales and construction activity are both believed to be driven by low interest rate financing available from banks and improved security situation across the country. With record low inflation, the State Bank of Pakistan (SBP), the nation's central bank, has cut discount rate to a 42-year low of 6%.

After its September meeting, the SBP said the rise in fixed investment financing in the energy generation and distribution, chemicals and services sectors signal possible increase in their productive activity in coming months. “The implementation of infrastructure development and energy projects under the China-Pakistan Economic Corridor (CPEC) will further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in 2015-16, which is expected to boost credit uptake,” it said.

Per Capita Cement Consumption Source: Global Cement

A dramatic decline in terrorist violence in the country since the launch of Pakistan Army's Operation Zarb-e-Azb and a big drop in international oil prices have helped drive economic recovery in the country in recent months.

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Pakistani Middle Class Pushes Car Sales Up 61%

Auto sales in Pakistan hit a two year high, jumping 61% in July, 2011 to 17,563 units from 10,942 units in the same month of last year. Pak Suzuki Motor Company led the auto sales up with 116 percent rise to 11,997 units from 4,503 seen in the same period last year. This is in sharp contrast to a Reuters report of 16% decline in auto sales in July across the border in India.

Pak Suzuki Motor Company saw a jump in all models while Honda and Indus Motors witnessed a slowdown. The latest addition to the Suzuki family Swift sprinted 285 per cent to 751 units while Mehran surged 179 per cent to 3,650 units. Liana posted its best month in more than a year by selling 100 units.

For Toyota Corolla, the best selling car in fiscal 2011, sales declined 16 per cent but still sold 3,681 units. Toyota Corolla remained the market leader but only by a small margin as they sold only 31 more units than second-highest selling car Suzuki Mehran.



Earlier, Economic Survey of Pakistan 2010-2011 reported that the first 9 months of fiscal 2010-2011 saw production of television sets jump 28.6% and automobile production increase by 14.6%. From July 2010 to March 2011, production of cars, light commercial vehicles and two and three wheelers grew by 16.4%, 20.5% and 12.6% respectively. These figures confirm the return of Pakistanis' appetite for consumer durables after a significant drop from 2007-2008 to 2008-2009.

In a separate news story carried by Bloomberg, Swiss food giant Nestle's Pakistan subsidiary said its sales of consumer packaged goods rose 25% year-over-year. Engro Foods, a local Pakistani competitor of Nestle, reported its sales climbed 46 percent to 7 billion rupees in the last quarter.

Rising sales of consumer durables like cars and fast moving consumer goods (FMCG) represent a clear sign of the return of the middle class consumers who had pulled back since 2008. This improvement has been been aided by rising incomes in the rural areas stimulated by higher food and commodity prices. Fast moving consumer goods (FMCG) – or Consumer Packaged Goods (CPG) – are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as milk, juices, sodas, toiletries, and packaged grocery items.

Nestle Pakistan's chief Ian Donald summed up the rising demand for his company's products as follows: “It’s a common perception that China and India are much bigger in terms of growth than Pakistan. But for Nestle, the per capita consumption of our products in Pakistan is twice as much as we have in China and India.” It should be noted that Nestle is the world's largest packaged food company.

Over the last two decades, Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report on Asia's rising middle class released in 2010.

The ADB report on Asia's rising middle class confirms that Pakistan's middle class has grown to 40% of the population, significantly larger than the Indian middle class of about 25% of its population, and it has been growing faster than India's middle class.

Coming on the eve of Pakistan's Independence Day this Aug 14, the news of rising sales of cars and other consumer products could lead to more hiring and help revive Pakistan's economy which has been stagnant since 2008.

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