KARACHI: Because consumers continued to be hesitant to take up expensive auto loans, the amount of auto finance fell for the twenty-first straight month, ending in March 2024, to Rs239 billion, a decrease of 1.4% or Rs3.5 billion on a monthly basis.
The State Bank of Pakistan (SBP) released data showing that, as of the end of June 2022, the overall decline in the previous 21 months was Rs128 billion, down from Rs368 billion.
Car finance has been negatively impacted by high monthly loan instalments, expensive financing (22% interest rate), exorbitant vehicle pricing, consumers’ limited purchasing power, and the SBP’s financing restrictions to reduce demand for cars.
Car, light commercial vehicle (LCV), pickup, and jeep sales decreased to 69,078 units in 9MFY24 from 110,898 units in the same period of the previous fiscal year.
Despite their best efforts, auto assemblers have not been able to draw in a significant number of consumers with their different incentive programs, which include lower mark-up rate alternatives, eye-catching sales packages, after-sales services, and discounts on car registration.
Both new and used automobile financing has been sluggish, according to a private banker, and the cost of a used car has risen to the point that it is now on par with cars that are built locally.
