Car Financing Witnesses 25% Increase Compared to Last Year

Car Financing Witnesses 25% Increase Compared to Last Year

Auto finance increased to Rs. 367 billion in April 2022, a 0.9 percent month-over-month (MoM) increase and a 25.4 percent year-over-year (YoY) increase.

This is a smaller increase in auto finance than last month, indicating that recent price increases have negatively influenced car demand, as projected by industry analysts early this year.

In March’s Toyota Indus Motor Company (IMC) quarterly financial briefing, CEO Ali Asghar Jamali stated that manufacturers are forced to raise prices owing to currency depreciation and increased operational expenses.

Earlier this month, the Engineering Development Board (EDB) called a meeting of all major automakers in Pakistan. During the conference, the Ministry of Industries and Production (MoIP) demanded that the companies justify the price increases.

Despite MoIP’s worries, manufacturers insisted that the price increases were beyond their control and might occur many times this year. During that meeting, the government issued a warning to all automakers about frequent price increases.

To prevent the import of CKD kits for up-market automobiles, the Ministry of Finance has recommended a 100 percent regulatory duty (RD) increase on domestically manufactured cars with engines greater than 1300cc. They also banned Completely Built-Up (CBU) vehicles from reining in the increasing import cost and protecting the local currency.

Pakistan’s economy is in turmoil these days, and the impacts are being felt by all businesses, including the automobile industry.