Auto financing rises 33 percent YoY in October

KARACHI: Pakistan’s auto sector continued its upward momentum in October 2025, with auto financing surging 33 percent year-on-year, according to banking data.

The total volume of auto loans reached Rs315 billion in October, compared to Rs236 billion in the same month last year, reflecting strong consumer demand and improved loan affordability.

On a month-to-month basis, the upward trend also remained intact. Auto financing increased 3.5 percent compared with September 2025, when the total stood at Rs305 billion.

Industry analysts attribute this continued growth to the sharp reduction in interest rates since mid-2024. In June 2024, the policy rate stood at 22 percent, but successive cuts have brought it down to 11 percent, significantly easing the cost of borrowing for vehicle buyers.

Bankers say the sector has been witnessing consistent momentum ever since the interest-rate decline began, with monthly demand strengthening as financing becomes more accessible for consumers.

In May 2024, Prime Minister Shehbaz Sharif ordered authorities concerned to implement a deletion policy to foster the country’s auto sector.

The prime minister, chairing a meeting on the trade sector, called for steps to promote exports of non-traditional goods and instructed for immediate payment of the certified duty drawback of the exporters.

Highlighting the significance of the private sector, he instructed to ensure consultation with them during the policy-making and implement the deletion policy to uplift the auto sector.

Prime Minister Shehbaz directed the relevant ministry to devise a comprehensive strategy to scrutinize the performance of trade and investment officers posted in Pakistan’s missions abroad, by rewarding the good performers and removing the incompetent ones.

The prime minister told the meeting that he would personally carry out the fortnightly review of the export sectors.

In the meeting, the prime minister was told that the discussion on the Free Trade Agreement between Pakistan and the Gulf states was in the final stage and transit trade agreements with Uzbekistan and Tajikistan had already been materialized.