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Car Financing Declines 22nd Month in a Row

Car financing continued to fall 22 months in a row in the calendar year 2024, down 23.7 percent YoY to Rs. 236 billion by the end of April from Rs. 309 billion in the same period last year.

According to the State Bank of Pakistan (SBP), consumer financing for house building declined by 3.3 percent to Rs. 206 billion by end-April 2024.

The auto sector has been in turmoil for almost two years now. During the 10 months of the ongoing financial year, automobile sales have fallen to 79,575 units compared to 115,381 units in 10MFY23.

Sales were stunted in the auto market over the last 10 months due to rising car prices, expensive auto financing, and reduced consumer purchasing power.

As seen in FY23, the cost of cars is still a massive barrier to sales. While some assemblers gave discounts on registration and other charges in the past few months, the overall growth in the sector remains stunted.

Meanwhile, personal loans on credit cards surged by 30.7 percent YoY to Rs. 116 billion by end-April 2024.

Overall credit issued to end-users (consumer financing) fell to Rs. 803 billion in April 2024, a 7.5 percent YoY decrease.

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