KARACHI: Automobile financing in Pakistan has reached a new all-time high, extending its growth streak for the 18th consecutive month despite an increase in the policy rate earlier this year.
According to data released by the State Bank of Pakistan (SBP), auto financing climbed to Rs369.12 billion at the end of May 2026, up from Rs359.5 billion recorded in April. The latest figure surpasses the previous record of Rs368 billion set in June 2022.
The continued rise in vehicle financing indicates that higher borrowing costs have had a limited impact on consumer demand. In April, the SBP increased its policy rate to 11.5 percent, but buyers have continued to take advantage of financing options offered by banks and automobile manufacturers.
Industry experts believe attractive financing packages, flexible repayment plans, and growing consumer confidence have helped maintain momentum in the market. Demand has also been supported by the introduction of new vehicle models, particularly hybrid and electric vehicles, which are gaining popularity amid persistently high fuel prices.
Pakistan’s automobile market also posted strong sales figures. Sales of cars, sport utility vehicles (SUVs), pickups, and vans reached 17,660 units in May 2026, representing a 19 percent increase compared to the same month last year. However, sales declined by 20 percent compared to April.
During the first eleven months of fiscal year 2025-26, total vehicle sales reached 183,704 units, marking a significant 45 percent increase from the corresponding period of the previous fiscal year.
The sector’s growth is further reflected in rising imports of vehicle assembly kits. Imports of semi-knocked down (SKD) and completely knocked down (CKD) kits by local assemblers nearly doubled to $1.877 billion during July-May FY2025-26, compared with $949 million during the same period last year.
Market analysts expect auto sales and financing activity to remain strong in the coming months as automakers expand their product offerings and consumers continue to seek fuel-efficient transportation options.
