Car financing continued to fall 20 months in a row in the calendar year 2024, down 25 percent YoY to Rs. 243 billion by the end of February from Rs. 325.9 billion in the same period last year.
According to the State Bank of Pakistan (SBP), consumer financing for house building declined by 3.6 percent to Rs. 207 billion by end-February 2024.
The auto sector has been in turmoil for the entirety of the financial year 2023-24, with automobile sales falling to 46,417 units in the first eight months of FY24 from 78,575 units in FY23.
Sales were stunted in the auto market over the last eight months due to extortionate lending rates, as well as the central bank’s limits on auto financing, which included an upper limit of Rs. 3 million and a significant reduction in loan repayment duration.
Cost of cars remained a significant barrier to increasing sales. While some assemblers gave discount on registration and other charges, these efforts failed to attract many buyers.
Personal loans on credit cards surged by 28 percent YoY to Rs. 111 billion by end-February.
Overall credit issued to end-users (consumer financing) fell to Rs. 810 billion in February 2024, an 8.8 percent YoY decrease.
