Data released by the Pakistan Automobile Manufacturers Association shows 11,911 cars were sold compared to the previous month's figures of 10,405 units.

Analysts quoted in the Pakistani media noted: "Surging Japanese yen against the rupee, lower agricultural income and depressed demand from flood-affected areas along with high interest rates are a recipe for lower car sales."

"The rupee has already depreciated by 15% so far in 2010 and car-makers have kept announcing price increases. "Continuous price increase may in fact be the reason for the rise in demand for cars."

The analyst added: "Car dealers anticipate prices will rise further and they may be stocking up to lock in higher profits."

Sales and production of trucks and buses dropped to 211 models from 326 in September.

However, car prices may continue to rise in the next few weeks as the rupee could weaken against the Japanese yen.