Despite expanding supply chain challenges, delayed deliveries, rising rates of own money, and some other factors, demand for automobiles in Pakistan is at an all-time high. This is reflected in the September 2021 auto financing statistics, which shows that automobile financing reached Rs. 338 billion, a new high.
According to the data, auto-financing has grown by 3.8 percent month over month (MoM) and 45.5 percent year over year (YoY). The increase is thought to be owing to reduced interest rates on auto loans and lower car prices as a result of the budget for 2021-22.
Read more: SBP tightens consumer lending rules to limit car finance
Furthermore, the government intends to increase annual car manufacturing in the country to 8 million units by 2026, and will soon introduce a new auto policy that will provide greater relief and incentives to automakers.
The current surge of new cars in Pakistan is also a major contributor to the rise in vehicle demand. The full implementation of the Automotive Industry Development and Export Plan (AIDEP) 2021-2026 is expected to accelerate the entry even more, increasing car demand.
However, it has been claimed that, as a result of increasing production and operational costs for manufacturers, vehicle prices may rise beginning next month, potentially effecting vehicle demand.
Furthermore, recurring concerns such as inventory shortages, delayed car deliveries, and the prospect of losing their own money are causing consumers to withdraw from the brand-new vehicle market. The impact of all of these variables on Pakistan’s auto sector will be revealed in the coming days.
