KARACHI: The outstanding auto financing continued its downward trend for the ninth month in a row, plunging almost 12.83 per cent to Rs317 billion in March from Rs363.55bn in the same month last year.

It witnessed a 2.74pc drop as compared to Rs325.86bn in February, data released by the State Bank of Pakistan (SBP) showed on Monday.

Phenomenal hikes in interest rates, soaring automobile prices, frequent plant shutdowns leading to delays in vehicle delivery, escalating petroleum costs and various measures by the central bank have collectively contributed to slowing down the pace of auto financing.

The interest rate has now tripled to 21pc, compared to 7pc in March 2020.

Fahad Rauf, Head of Research at Ismail Iqbal Securities, said auto financing is not viable due to high-interest rates and various restrictions by the SBP.

“I think the share of auto financing in total car sales is now almost zero as compared to 30-40pc previously,” he said.

Fahad said sales of vehicles through bank financing may remain under pressure as long as the interest rates and inflation remain high. However, the International Monetary Fund (IMF) is forcing the government to raise the interest rate to 25pc, which would further shrink auto sales, he added.

Suzuki bike price

In a surprise move, Pak Suzuki Motor Company Ltd (PSMCL) increased the prices of two-wheelers despite the suspension of production from May 2-9.

As per the circular issued to the authorised dealers, the new rates of Suzuki GD110S, GS150, GSX125 and GR150 will be Rs335,000, Rs364,000, Rs488,000 and Rs521,000 from Tuesday as compared to Rs322,000, Rs350,000, Rs469,000 and Rs501,000, respectively.

Pak Suzuki’s faced only a 3pc sales drop to 26,935 units in 9MYF23 from 27,693 units in the same period last fiscal year, while sales of other assemblers fell by 24-77pc in the above period.

Gold’s new peak

Local gold rates continued a bullish trend on Monday hitting an all-time high at Rs226,900 per tola and Rs194,530 per 10-gram, up Rs1,400 and Rs1,200, respectively, from Saturday.

According to the All Sindh Saraf Jewellers Association, the world gold price soared by $5 per ounce to $2,022.

Published in Dawn, May 9th, 2023