Auto financing keeps plunging

Consumers remained reluctant to avail costly auto financing, which consequently plunged for the 21st consecutive month ending March 2024 to Rs239 billion, down by 1.4 per cent or Rs3.5bn month-on-month. According to data issued by the State Bank of Pakistan (SBP), the total decline in the last 21 months stood at Rs128bn, down from Rs368bn at the end of June 2022. Expensive financing, due to a 22 per cent interest rate, high monthly loan instalments, and the unbearable prices of vehicles, coupled with consumers’ thin buying power and the SBP’s curbs on financing to soften vehicle demand, have collectively impacted car financing. Sales of cars, LCVs, pickups, and jeeps totalled 69,078 units during 9MFY24, down from 110,898 in the same period last fiscal year.