KARACHI: Auto financing reached Rs360 billion in April, up 37 per cent from the same period a year earlier, marking the 17th consecutive monthly increase, according to the latest data from the State Bank of Pakistan (SBP).
Car loans rose by 4.0 per cent month-on-month (MoM) in April.
“Financing levels are now just 2.0 per cent below the June 2022 peak, signalling that a new all-time high may soon be reached,” said Topline Securities in a brief note.
The improving consumer demand and a pickup in economic activity amid declining borrowing costs and the lagged impact of earlier policy rate cuts helped increase auto loans.
“During July-March FY26, the private sector credit flows expanded across working capital, fixed investment, and consumer finance,” the SBP said in a monetary policy statement last month.
“Sectoral flows were concentrated in textiles, wholesale and retail trade, and chemicals, while the sustained rise in consumer financing points to recovery in household demand,” it added.
Excluding the tractor segment, sales of cars, vans, pickups, and sport utility vehicles saw strong year-on-year growth of 107 percent and a month-on-month increase of 42 per cent, totalling 22,015 units in April. This brings the cumulative sales for the first ten months of FY26 to 166,044 units, which is a 49 per cent increase compared to the same period last year.
However, as interest rates began to increase amid inflation concerns, it remains to be seen whether car loans will sustain their upward trend in the coming months.
The SBP raised its key policy rate by 100 basis points to 11.5 per cent in April.
