After a months-long decline, car sales in the country seem to revive. In contrast, car financing is behaving differently. Auto loans in Pakistan dropped by 24% year-on-year to Rs236 billion in April 2024, marking the 22nd month in a row of declining auto financing.
This trend is mainly due to higher borrowing and living costs in con junction with prevailing economic challenges that have reduced consumer demand.
According to the latest data from the State Bank of Pakistan (SBP), there was a 2% decrease in auto loans from March to April, falling from Rs. 239 billion. The decline in auto financing is linked to stabilization measures over the past two years, such as high interest rates and stricter lending rules.
Car Sales
As per the Pakistan Automotive Manufacturers Association (PAMA) report, month-on-month (MoM) car sales has increased by 12% last month, selling 10,515 in April 2024 compared to 9,381 vehicles in March 2024.
However, in a year-on-year (YoY) analysis, there’s been a staggering increase of 135%, thanks to the stability in Pakistani Rupee against mighty US dollar. Car manufacturers managed to sell 10,515 cars compared to 4,483 vehicles during the same period last year.
Analysts believe that the drop in car financing is due to increased borrowing costs and broader economic challenges. As the economy faces constraints, consumer demand for car loans has decreased, impacting the auto industry significantly.
Company-Wise Sales Breakdown
- Toyota Pakistan witnessed a 21% increase in sales, selling 2,065 units last month compared to 1,705 vehicles in last month.
- Meanwhile, Honda Atlas witnessed a significant down of 54%, selling 1,003 units last month compared to 2,188 units in March 2024.
- Pak Suzuki Motors Company’s sales increased by considerable 46%, selling 6,000 vehicles against 4,101 cars in previous month.
- Hyundai Nishat sales increased by 18%, selling 686 units last month compared to 582units in March’24.
Similarly, motorbike and three-wheeler sales saw an impressive 15% increase last month, reaching 107,590 units compared to 93,606 units in March 2024. Atlas Honda sales surged by 19%, reaching 95,069 units last month, up from 80,139 units in March 2024.
