KARACHI: Despite a sales slowdown, outstanding car loans rose for the 22nd consecutive month to Rs407 billion in September from Rs393.3bn in August, data released by the State Bank of Pakistan (SBP) showed.

Assemblers saw a 12 per cent year-on-year and 3pc month-on-month drop in sales of cars, SUVs, pickups and vans to 15,104 units in September, owing to uncertainties over the delay in the new auto policy, followed by confusion over the general sales tax (GST) on hybrid vehicles, which was later settled at 18pc for vehicles up to 2,000cc, down from 25pc.

However, cumulative auto sales rose by 19pc to 50,480 units in 1QFY27.

Topline Securities Chief Executive Mohammed Sohail said auto financing is likely to rise, but more slowly, amid uncertainty over the new auto policy and rising borrowing costs, as KIBOR (Karachi interbank offered rate) has edged higher over the last few weeks.

Auto financing depends on the interest rate. At the last Monetary Policy Committee meeting held on Sept 14, the central bank kept the policy rate unchanged at 11.5pc.

Topline Securities, in its recent report, said that given the ongoing uncertainty over the global geopolitical situation, its impact on the global energy supply chain, and rising inflation expectations amid elevated oil prices and food inflation, “the State Bank may raise the policy rate by 50bps to help mitigate any prolonged inflationary and external shock.”

A banker dealing with auto loans said that car financing will improve further from November, as the car segment is expanding due to rising consumer confidence, greater trust in Chinese-made vehicles, the launch of new models, and the entry of new brands into the market.

The next few months appear calm in terms of sales, given the massive rise in the import of semi- and completely knocked-down kits (SKD/CKD) by the assemblers.

Published in Dawn, October 18th, 2026