Car Financing Reaches All-Time High at Rs. 285 Billion

The Director of Topline Securities, Mohammad Sohail, told the media yesterday that auto-financing has reached an all-time high of Rs. 285 billion, recording a Year-on-Year (YoY) increase of 30 percent or Rs. 66 billion and a Month-on-Month (MoM) increase of 4.5 percent or Rs. 12 billion for March 2021.

Sohail attributed the said rise to a low interest rate. Last year, the interest rate was at 13.5 percent, whereas this year, the interest rate is at 7 percent, which significantly contributed to the 30 percent YoY increase in auto-financing in March 2021.


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Sohail highlighted that, despite the skyrocketing prices of vehicles in Pakistan, the demand is still high due to the pocket-friendly bank finance services that offer low interest rates. He estimated that car financing contributes to 50 percent of the total car sales volume in Pakistan.

He added that the people buying brand new cars are mostly high-income individuals that hail from the upper-middle-class and above. He agreed to the likelihood that such people have begun investing in cars as of late since they have ample surplus cash saved up due to less foreign travel due to the global pandemic.


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March 2021 has been a solid year for the Pakistani auto industry as it not only saw record high auto-financing numbers but also recorded a massive increase in car sales compared to the same time last year. As per reports from Pakistan Automotive Manufacturer’s Association (PAMA), over 20,000 units were sold in March of 2021.

Bear in mind that the sales figures mentioned above do not include the figures of the several new automakers such as KIA, Proton, Changan, United Motors, Regal Motors, etc., who have also been doing quite well in terms of sales. Keeping note of the aforementioned facts, it is safe to say that the auto industry of Pakistan is moving in a more promising direction.