Car Financing Declines 23rd Month in a Row

Car financing continued to fall 23 months in a row in the calendar year 2024, down 22.5 percent YoY to Rs. 233 billion by the end of May from Rs. 300 billion in the same period last year, data revealed by the State Bank of Pakistan (SBP). Sales were stunted in the auto market over the last 11 months due to rising car prices, expensive auto financing, and reduced consumer purchasing power. As seen in FY23, the cost of cars is still a massive barrier to sales. While some assemblers gave discounts on registration and other charges in the past few months, the overall growth in the sector remains stunted. Meanwhile, personal loans on credit cards surged by 28.6 percent YoY to Rs. 118 billion by end-May 2024. Consumer financing for house building declined by 3.5 percent to Rs. 205 billion by end-May 2024. Overall credit issued to end-users (consumer financing) fell to Rs. 801 billion in May 2024, a 7.4 percent YoY decrease.