Auto financing in Pakistan increased by 2% month-on-month and 12% year-on-year to reach Rs263 billion in April, marking the fifth consecutive monthly rise.
Despite this growth, financing remains 28% below its peak of Rs368 billion recorded in June 2022.
The benchmark interest rate has dropped to 11% after remaining at 22% for over a year until June 2024, encouraging more buyers to opt for auto leasing on new and used vehicles.
However, the auto industry has raised concerns over the government’s planned tariff rationalisation under the National Tariff Policy for 2025-30, which includes significant reductions in import duties across sectors. This comes at a time when auto sales and financing are showing positive momentum.
The Pakistan Association of Auto Parts Manufacturers (Paapam) warned that the policy could lead to the closure of many local auto parts firms. The association said the proposed maximum 15% tariff exposes domestic manufacturers to competition from cheaper imports, risking the loss of up to 500,000 jobs and damaging the manufacturing sector.
