Due to increasing prices, increased limitations on auto loans, and major production cuts, auto financing has been on a continuous decline.
While the reduction is modest, there is a big difference between vehicle financing in June 2022 (approximately Rs. 414 billion) and June 2023.
According to the latest data from Ismail Iqbal Securities (IIS) auto loans totaled Rs. 346 billion in June 2023, a 1.7% month-over-month (MOM) decline and a 17% year-over-year (YOY) decline.
According to the report, car financing has hit its lowest level since June 2021 when auto loans stood at Rs. 341 billion. It is also worth mentioning that this year’s decline is greater in terms of MOM percentage than in previous years. Experts predict that car loans will likely rise again as the economy stabilizes.
2023 has been the worst year for the car industry due to factory shutdowns, diminished demand, rising inflation, operational hindrances, cost increase, and other limiting factors.
Above all, due to an ongoing dearth of foreign exchange, industry experts reckon that the government will likely keep the auto-sector development on the back burner.