Auto loans rise for 21st month

Dawn reported that outstanding car loans grew for a 21st straight month, reaching Rs393.3 billion in August compared with Rs386.3 billion in July. The State Bank of Pakistan published these figures, and the rise continued even though monthly vehicle sales slipped.

Vehicle sales in August totalled 15,558 units, which was 11 per cent higher than a year earlier but 21 per cent lower than in July. Cumulative volumes stood at 35,376 units over the first two months of FY27, a 41 per cent jump from the same period a year before. A brokerage analyst linked the monthly decline to uncertainty over the new auto policy, while an unsettled regional situation also hit the supply chain.

The Pakistan Automotive Manufacturers Association (PAMA) urged authorities to release the next auto policy promptly, warning that the monthly decline could otherwise become a lasting downturn. Indus Motor Company's FY26 annual report argued that local auto financing caps and repayment periods are conservative compared with regional markets. The company proposed lifting the maximum financing ceiling from Rs3 million to Rs10 million and stretching the longest loan term from three years to six.