The Pakistani auto industry is witnessing a transformative shift, as the production of electric vehicles (EVs) marks a significant milestone for the sector. This development, which began in November 2024, is part of a broader trend toward modernization and sustainability in Pakistan’s industrial landscape. The shift towards EV production is expected to have far-reaching implications for the country’s economy, particularly in terms of reducing dependence on fossil fuels and fostering innovation in the automotive sector.
In October 2024, the overall Large-Scale Manufacturing (LSM) sector showed a marginal year-over-year (YoY) growth of 0.02%, a notable improvement from the 5.79% contraction recorded in October 2023. This slight growth signals a positive shift in economic activity, despite ongoing challenges. On a month-over-month (MoM) basis, however, LSM saw a decline of 2.24%, primarily due to a seasonal dip in the beverages sector. As winter approached, demand for beverages typically decreased, leading to lower production levels. Nevertheless, 12 out of the 22 LSM sectors performed positively during the month, indicating resilience and continued growth in key industries.
The auto industry, in particular, has shown robust performance. During the first four months of FY2025 (July to October), the sector experienced a 25.2% increase in production and a 24.8% rise in vehicle sales. This growth was driven by strong demand for cars, trucks, buses, and jeeps. Specifically, car production surged by 60.8%, while truck and bus production jumped by 89.8%, and jeeps and pick-ups saw a 64.2% increase in production.
A major development in November 2024 was the initiation of electric vehicle production in Pakistan. This is seen as a critical step in the country’s journey toward a more sustainable automotive industry, in line with global trends. The shift to EVs not only supports environmental goals but also opens new avenues for innovation and investment in the automotive sector. The entry of electric vehicles into the market is expected to boost the local manufacturing industry, create jobs, and reduce Pakistan’s reliance on imported fuels.
In addition to automotive growth, other sectors also showed signs of strength. For instance, cement dispatches increased by 5.6% YoY in November 2024, totaling 4.1 million tonnes. Domestic cement dispatches grew by 2.4%, while export dispatches surged by 21.3%, reaching 803,258 tonnes. This indicates a rising demand in the construction industry and a growing export market for Pakistani cement. Despite this, total cement dispatches for the first four months of FY2025 were lower than the previous year, with domestic dispatches falling by 11.6%, though export volumes increased by 28.7%.
Overall, these developments point to a gradual recovery in Pakistan’s industrial activity, with key sectors such as automotive, construction, and manufacturing showing resilience despite the ongoing economic challenges. The focus on electric vehicle production, in particular, marks the beginning of a new era for Pakistan’s automotive industry, positioning it to play a more prominent role in the global shift toward sustainability and green technology.