Pakistan’s car sales increased 45% year-on-year and declined 8.2% month-on-month in October versus a year on the back of an expanding economy, The News reported Friday, citing industry data showed.
Growth was seen moderating on rising borrowing cost and tight credit conditions, the publication reported, highlighting the State Bank of Pakistan’s (SBP) decision on car financing to slowdown off-take in the near-term.
Passenger car sales increased by 45.14% to 17,413 units during October compared to the 11,997 units sold during October last year, as per data from the Pakistan Automotive Manufacturers Association (Pama).
But October sales remained lower by 8.2% to 18,971 units of September 2021, the data showed.
Cumulative sales in the first four months of FY21-22 (July-October) were recorded at 74,952 units, up by 71% to 43,865 units in the same period last year.
Though car sales increased during the outgoing month, some impact was expected on car financing after the SBP increased the down payment limit and reduced the financing period to a maximum of five years, analysts said.
“The effect was visible on [the] sale of smaller cars, which are mostly purchased by low-income people on bank financing,” an analyst was quoted as saying. He said that due to an increase in car prices, inflation, and rupee depreciation, car sales would be affected in the coming days.
In addition to this, the discount rate is also expected to increase in the upcoming monetary policy. “Car financing will be affected, resulting in a decline in car sales,” he said.
