Auto Financing Surges 27.7% YoY in March 2022

Auto Financing Surges 27.7% YoY in March 2022

Arif Habib Limited (AHL) recently released data indicating that auto financing will increase by Rs. 364 billion in March 2022. This equates to a 1.9 percent month-over-month (MoM) increase but a 27.7 percent year-over-year (YoY) growth. Arif Habib Limited (AHL) recently released data indicating that auto financing will increase by Rs. 364 billion in March 2022. This equates to a 1.9 percent month-over-month (MoM) increase but a 27.7 percent year-over-year (YoY) growth.

This has been a relatively large increase in car financing in the last three months, implying that the recently raised interest rate has had little impact on car demand. Analysts predicted earlier this year that the State Bank of Pakistan’s (SBP) new regulations would limit the country’s soaring car demand.

Pakistan’s automobile industry is still in high demand. Analysts, on the other hand, believe that the combination of car financing restrictions and price increases will likely hurt car sales in the future.

Muqeet Rehman of Ismail Iqbal Securities (IIS) stated earlier this month:

Given the currency depreciation, further price increases cannot be ruled out. Continuous price increases, combined with higher interest rates and restrictions on auto financing, are likely to dampen auto demand in the coming fiscal year.

The auto industry’s sales have yet to show signs of slowing due to price increases and auto-finance restrictions. The latest round of price increases may just begin to stifle car sales in the coming months.

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