Auto-financing plunged 16th consecutive month in October 2023, with the total car loan amount falling by 3 percent month-on-month to Rs. 264 billion from Rs. 272 billion in September.
Data from the State Bank of Pakistan (SBP) suggests that auto financing peaked at Rs. 368 billion in June 2022 and has since fallen by Rs. 104 billion.
SBP reduced repayment length and raised the vehicle loan ceiling to Rs. 3 million, hurting local assembler sales.
Car, van, and truck sales plummeted 44 percent to 27,163 units in 4MFY24, compared to 48,573 units in SPLY, amid stunted demand following a significant price increase and expensive auto financing. Also, assemblers have been frequently halting production since last year due to shortages caused by the central bank’s import restrictions.
CEO Topline Securities Mohammed Sohail said, “It seems we are near the bottom in auto financing but we may see some improvement in it as Kibor is coming down”. He predicted that consumers will return to banks for auto loans when the central bank lowers its policy rate, which is expected soon.