Auto financing in Pakistan jumps 36% as car sales hit 3.5-year high

Automobile financing in Pakistan rose to PKR 328 billion in January, up 2.79% from PKR 319.08 billion in December, according to data released by the State Bank of Pakistan.

On a year-over-year basis, car financing surged 35.76% compared with PKR 241.6 billion in January last year, the central bank said.

Consumer financing for house building stood at PKR 221.95 billion at the end of January, reflecting an 11.02% increase from a year earlier. On a monthly basis, housing finance edged up 0.75% from PKR 220.31 billion in December.

Financing for personal use reached PKR 274.86 billion, rising 8.66% year-over-year and 2.56% from the previous month.

Overall consumer credit climbed 20.55% from a year earlier to PKR 1.02 trillion in January. Compared with PKR 997.94 billion in December, consumer financing increased 1.99% month-over-month.

Private sector credit

Outstanding credit to the private sector grew 6.56% year-over-year to PKR 10.34 trillion in January. However, on a sequential basis, private sector loans declined 3.09% from PKR 10.67 trillion in December.

Within private sector lending, loans to the manufacturing sector stood at PKR 5.64 trillion, down 0.8% from a year earlier and 3.74% from the previous month.

Borrowing by the construction sector amounted to PKR 215.81 billion in January, up 1.54% year-over-year but down 1.61% month-over-month.

Loans to the agriculture, forestry and fishing sectors increased to PKR 601.35 billion, marking a 36.25% rise from a year earlier, though they declined 2.68% from December.

Car sales

Separately, Pakistan’s car sales, as reported by the Pakistan Automotive Manufacturers Association, totaled 23,055 units in January — a 43-month high — up 36% from a year earlier and 74% from December.

Cumulative sales for the first seven months of fiscal year 2026 reached 111,377 units, up 43% from 77,686 units in the same period of fiscal year 2025.

The month-over-month surge was largely driven by new-year registrations, as buyers typically delay deliveries to secure January registrations for better resale value. Year-over-year growth was supported by new market entrants, lower interest rates, easing inflation and improving macroeconomic sentiment.

Among automakers, Indus Motor Company and Honda Atlas Cars recorded their highest monthly sales in 43 months in January.