According to Arif Habib Limited (AHL), auto finance would increase by Rs. 364 billion in March 2022. This indicates a year-over-year (YoY) growth of 27.7%, despite a month-over-month (MoM) increase of just 1.9 percent.
In the previous three months, there has been a significant increase in automobile financing, implying that the recently raised interest rate has had no impact on car demand. Industry analysts predicted earlier this year that the State Bank of Pakistan’s (SBP) new policies would limit surging car demand.
Pakistan’s automobile sector is still in great demand. Analysts, on the other hand, feel that the combination of auto finance restrictions and price increases would undoubtedly damage future car sales.
Muqeet Rehman of Ismail Iqbal Securities (IIS) pointed out earlier this month that:
Further price increases cannot be ruled out in light of the currency devaluation. Continuous price increases, along with increasing interest rates and restrictions on vehicle financing, are expected to restrict demand in the coming fiscal year.
The auto sector has yet to show signs of slowing sales as a result of price increases and auto-finance limitations. In the coming months, the new round of price rises may start to stifle automobile sales.
