Auto Loans Rise to Rs319bn for 13th Month in Pakistan

Auto financing in Pakistan recorded its 13th consecutive month of growth, with outstanding auto loans reaching Rs319 billion by end-December 2025, marginally up from Rs318 billion in November, according to data released by the State Bank of Pakistan (SBP).

While the December increase was relatively modest compared to prior months, the slowdown has been attributed to deferred vehicle purchases amid the transition to new model years and updated registration procedures. Notwithstanding this temporary moderation, the ongoing recovery in auto financing remains substantially below the historical peak of Rs368 billion observed in June 2022, when annual car sales approached 240,000 units.

Topline Securities noted that the introduction of new vehicle models combined with progressively declining interest rates is expected to sustain momentum in auto financing, notwithstanding the prevailing Rs3 million financing ceiling.

During the first half of FY26 (July–December 2025), aggregate automobile sales—including cars, SUVs, pickups, and vans—registered a robust 46% year-on-year increase, rising to 88,322 units from 60,676 units in the corresponding period of the previous fiscal year. This surge has been driven by the entry of new market players, easing inflationary pressures, lower borrowing costs, and an overall improvement in the macroeconomic environment.

Looking forward, analysts anticipate sustained strength in auto sales, underpinned by a remarkable 144% year-on-year increase in imports of semi-knocked-down (SKD) and completely knocked-down (CKD) kits, which totalled US$982 million in H1-FY26 compared to US$402 million in the same period last year. This significant uptick in CKD/SKD imports has occurred despite ongoing assertions of enhanced localisation in domestic vehicle production.