Pakistan’s automobile sector posted double-digit growth of 23.4 percent from July 2020 to March 2021, sharply improving upwards from a contraction of 37.7 percent during the same time last year, stated the quarterly report by the State Bank of Pakistan (SBP).
The improvement was witnessed across the board, with cars improving 24.7 percent, motorcycles 20.3 percent, LCVs 30.2 percent, and tractors 57.5 percent. Low-interest rates, relative stability in automobile prices, and the introduction of new models led to this increase.
Consumer financing for the automobile sector was registered at Rs. 73.6 billion, up from only Rs. 3.2 billion the year before, the report stated. Almost 40 percent of these loans were disbursed in the third quarter – January to March 2021.
The price stability was also significant, as the overall registered increase in automobile prices was merely 3.4 percent for the three quarters as opposed to 20.8 percent for nine months of the previous fiscal year.
Under the Automotive Development Policy, 2016-2021, several new auto-assemblers invested resources in the automotive industry during the previous fiscal year.
The government’s incentives to revive the economy from the pandemic impacts also had a positive effect on the automobile sector. The indirect impetus came from the improved agriculture sector and construction sector. Record remittances also contributed to the increase witnessed in sales of automobiles, the report noted.