A possible upturn in the auto sector?

Amid restrictions on financing above the vehicle price of Rs3 million followed by the limited tenor of the loan payment, auto sector stakeholders are cautiously optimistic that the cut in interest rate from 22 per cent in June 2024 to 17.5pc on Sept 12 will boost auto sales. Auto financing plunged for the 26th consecutive month to Rs227.3 billion in August 2024 from Rs368bn in June 2022. Banks’ lucrative offers, like no upfront payment or registration, exclusive insurance rates, flexible financing limits, etc have yet to lure buyers. A private banker said market dynamics have taken a turn for the positive this month as some consumers are showing positive responses after a persistent drop in the Karachi Interbank Offered Rate to 17.46pc from the peak of 25pc in September 2023. “A few buyers are walking in, mainly for small car financing,” he said.