In April 2022, auto financing increased to Rs. 367 billion, a 0.9 percent month-over-month increase and a 25.4 percent year-over-year increase.
This is a smaller increase in auto finance than last month, indicating that recent price rises have had a negative impact on car demand, as projected by industry analysts early this year.
In a March quarterly financial briefing, Ali Asghar Jamali, CEO of Toyota Indus Motor Company (IMC), stated that automakers had no choice but to raise prices owing to local currency depreciation and rising operational costs.
Earlier this month, the Engineering Development Board (EDB) held meetings with all of Pakistan’s major automakers.
The Ministry of Industries and Production (MoIP) asked for clarification from the companies about the price rises during the meeting.
To prevent the import of CKD kits for up-market automobiles, the Ministry of Finance has suggested a 100 percent regulatory duty (RD) rise on locally assembled cars with engines greater than 1300cc.
To keep in the increasing import cost and maintain the local currency, they also imposed a complete ban on Completely Built-Up (CBU) vehicles.
Pakistan’s economy is in difficulty these days, and all businesses, including the auto sector, are facing the effects.