Auto Loans in Pakistan Hit Rs319 Billion: Growth Slows Amid New Model Launches

Auto loans in Pakistan have been on an upswing for over a year now. By the end of December 2025, they hit Rs319 billion. That's according to fresh data from the State Bank of Pakistan. It's the 13th straight month of gains. But things aren't moving as fast as before. Buyers are holding off, waiting for the new model year to kick in.

This slowdown makes sense. When car companies switch to new models, people often pause their purchases. They want to see what's coming next. Still, the total is inching up. And it's a sign the market is recovering, even if it's not back to its old highs yet.

Below the Peak: A Look Back at 2022

Remember June 2022? Auto financing peaked at Rs368 billion then. Car sales were booming. Fast forward to now, and we're still Rs49 billion short of that record. Why the gap? A mix of economic ups and downs played a role. High interest rates earlier scared off buyers. Inflation bit hard, too.

But things are turning around. The recovery started slowly, but it's steady. Analysts point to a few key drivers. Falling interest rates make loans cheaper. That pulls more people into showrooms. And new models? They're like fresh bait for buyers.

Sales Surge in FY26: What's Fueling the Fire?

The first half of fiscal year 2026 tells a positive story. Vehicle sales jumped 46% compared to the same period last year. That's huge. Easing inflation helped. People have more cash in their pockets. The overall economy looks better too. Stable macros mean confidence is back.

New players are entering the market. That shakes things up in a good way. More choices for buyers. And assemblers are gearing up. They're importing more vehicle kits. That means production ramps up. Expect stronger sales in the months ahead.

New Launches on the Horizon for 2026

2026 looks exciting for car fans in Pakistan. Sazgar Engineering is set to roll out new CKD models. CKD stands for Completely Knocked Down. It means parts come in kits and get assembled here. That often keeps prices down.

Other brands are joining the fray. Think SUVs and hybrids. These segments are hot right now. But with more options, competition gets fierce.

Price Wars in SUVs and Hybrids

Take the JAECOO J5 HEV. It's a new hybrid that's priced aggressively. Launches like this put pressure on everyone else. Buyers win with lower prices. But for sellers, it's a battle. They have to cut deals or add features to stay in the game.

This isn't just about one model. The whole passenger vehicle market feels it. More hybrids mean a shift toward greener rides. Fuel efficiency matters more with rising global awareness. Pakistan's market is catching up.

And it's not stopping. Expect more imports and local assemblies. That could push auto loans higher as people finance these new wheels.

What Falling Interest Rates Mean for Buyers

Interest rates are dropping. That's big news for anyone eyeing a car loan. Lower rates mean smaller monthly payments. It makes owning a car more doable for families.

The State Bank has been easing policy. Inflation is under control. That gives them room to cut. Buyers who waited might jump in now. Especially with new models tempting them.

But it's not all smooth. Delays in purchases show caution. People want the latest tech or design. Waiting a bit could save regrets.

Challenges Ahead: Competition and Market Pressure

Intense rivalry is a double-edged sword. Great for consumers. Tough for companies. Prices might drop further. But profit margins shrink. Some assemblers could struggle.

Imports of kits are up. That boosts supply. But if demand slips, we could see overstock. No one wants that.

Still, the outlook is bright. Analysts predict steady growth. Auto financing should keep rising, even if slowly.

Wrapping Up: A Market in Motion

Pakistan's auto sector is alive and kicking. Loans at Rs319 billion show progress. Sales up 46%? That's momentum. New models and lower rates fuel it.

But we're not at the peak yet. Competition will shape 2026. Buyers, keep an eye out. Deals are coming.

This recovery ties into bigger economic wins. Stable inflation and growth help. For everyday folks, it means easier access to vehicles. Whether for work or family, cars matter.

And that's the story so far. Watch for updates as new launches hit the roads. For more updates, visit DrivePK.com