Where Indelicate handling of economic charts has resulted in a back-to-back increase in car prices, non-issuance of letters of credits (LCs) from the State bank of Pakistan and loan restrictions has made the matter worse.
Price hikes and mounting interest rates have affected car financing – observed a slight down of two percent (MoM), came in at Rs. 361 billion last month. Whereas year-on-year auto financing surged by 15 percent in the face of recovery recorded after COVID-19.
A report has revealed that unloading cumulative price hikes, burgeoning interest rates, and the restriction imposed on the loan process have dropped the car demand, which in turn lowered sales.
Market Analysts have reported that State bank’s restrictive measures, booking suspensions, and long delays in vehicle delivery will slow auto financing.
Honda Atlas Cars Limited has stated that car financing contributes 40 percent of total HACL sales, and the current fuss observed in the market has dropped it to 30 percent – marking a considerable drop of 25-35 percent in sales in FY23.
Similarly, Pak Suzuki has predicted a 5-10pc drop in sales in FY23 in the face of high prices and interest rates, and loan restrictions. Moreover, auto financing contributes 35 percent of the company’s total sales.
Indus Motors Company has reported that car financing accounts for 26 percent of total sales. And again, unavailability of parts and prevailing exchange rate uncertainty have shrunken the company sales by 25-35 percent.
Car Sales Declines 58% In July 2022
The PAMA Report has revealed the sales figures for July 2022 – warrant serious reflection. Here, the number game translates that car sales dropped by 58 percent last month.
As per reports, car sales in July stood at 11,883 units compared to 28,379 units in June 2022.
What do you think about recent report regarding car financing? Drop your thoughts in the comments section.
