According to information from the State Bank of Pakistan (SBP), the extraordinary credits for the period finishing September remained at Rs227.541 billion as against Rs227.296bn in August, showing a miserable increment of 0.2 percent month-on-month (Mother).
In June 2022, auto financing reached its peak of Rs368 billion.
On June 10, the State Bank of Pakistan lowered the interest rate for the first time, from an unprecedented 22 percent, to 20.5 percent. Following this, a further reduction to 19.5 percent on July 29 and 17.5 percent on September 12 revived auto financing sales.
In light of reports of additional drops in the SBP policy rate, analysts in the corporate sector offered a variety of perspectives regarding the viability of bank car leasing.
Tahir Abbas, head of exploration at Arif Habib Ltd (AHL), said car supporting is getting in light of the fact that banks offer different fixed rates as they expect further relaxing of money related approach position.
He stated that banks were also attempting to promote and achieve advances to the deposit ratio threshold while also locking in their markup rates.
According to Mr. Abbas, the market has seen an increase in car demand as a result of the price drop, which has also helped revive auto financing.
Mohammed Sohail, CEO of Topline Securities, stated that “we foresee an increase in auto financing” as a result of economic stability and falling interest rates. Two-wheeler and four-wheeler sales improve after several months.
Pak Kuwait Investment Company’s head of research and development, Samiullah Tariq, stated: Car funding ought to support as constructing agents are giving limits, while banks are offering fixed rates.” He added that there is unmet demand as a result of the decline in sales over the past two years.
The local assemblers imported completely knocked down (CKD) kits worth $213 million between July and September of FY24, up 15.23 percent, according to data from the Pakistan Bureau of Statistics (PBS).
Despite Pak Suzuki Motor Company Ltd. and Indus Motor Company’s shutdowns, sales of cars increased to 20,068 units during IQFY25 from 16,021 units during the same time last year. Sales of pickups, jeeps, vans, and SUVs also increased to 7,517 units from 4,961 units during the same time last year.
