Auto loans rise to Rs336 billion as car demand continues despite risks

Auto financing in Pakistan rose to Rs336 billion by the end of February, marking the 15th consecutive month of growth. Outstanding loans increased from Rs328 billion in January, supported by continued consumer demand despite fewer working days in February, according to State Bank of Pakistan data.

Spending remained elevated following the model-year change, which typically drives vehicle purchases.

Import data indicates a positive outlook for the sector. Car assemblers imported semi- and completely knocked-down kits worth $1.3 billion during July–February FY26, up 126% from $575 million in the same period last year.

However, developments in the Middle East have introduced uncertainty. Industry participants have raised concerns about possible disruptions in the supply of imported parts, along with higher freight and insurance costs linked to the conflict.

Automakers expect delays in shipments and logistical constraints in the coming weeks, which may affect production schedules. Shipping routes passing through the region remain exposed to increased costs and congestion.

Market trends remain mixed. Some dealers report a slowdown in bookings in urban areas ahead of Eidul Fitr, while demand in rural markets continues. Buyers are also monitoring potential price changes linked to the external situation.

The used car segment has seen higher activity in lower price brackets, reflecting purchasing constraints among consumers. Dealers noted that interest in new models remains, but resale demand may not match initial bookings.

Industry representatives expect the impact of supply disruptions to become clearer over the next month, as companies assess shipment timelines and inventory levels.