Loans hit PKR 294 billion in August, boosting car sales by 62% year-on-year as easing rates and consumer confidence lift the auto sector
Auto financing in Pakistan surged to its highest level in more than two years in August, signaling a potential rebound in the country’s automobile sector amid easing interest rates and improving consumer sentiment.
According to data released this week, auto loans climbed to PKR 294 billion in August, marking a 29% increase from a year earlier and a 3% rise compared to July. This is the highest figure recorded since June 2023, although still 20% below the peak of PKR 368 billion seen in June 2022.
Analysts say the recovery in auto financing reflects growing demand for vehicles as borrowing costs decline, a trend that could lift sales and earnings for automakers listed on the Pakistan Stock Exchange.
“The uptick in financing activity is an encouraging sign for the auto industry, especially after a prolonged slump due to inflation and high interest rates,” said a senior analyst at a Karachi-based brokerage firm.
While industry-specific sales data for August have yet to be released, market observers anticipate that the momentum in financing could translate into stronger sales in the coming months, supporting a broader recovery in the consumer sector.
According to Topline Securities, car sales in Pakistan clocked at 14,050 units in August, reflecting a 62% rise compared to same month last year and up 27% from July. Despite floods, the industry has recorded growth, driven primarily by higher sales of Pak Suzuki Motor Company.
The year on year growth is supported by a more stable macroeconomic environment, introduction of more variants, lower interest rates, easing inflation, and improving consumer sentiment. During two months of the current fiscal year sales rose by 45% to 25,093 units from 17,288 units compared to the same period last year.
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