Auto financing climbs to Rs345.34bn as March vehicle sales ease MoM

KARACHI: Outstanding auto financing rose for the 16th straight month in March, reaching Rs345.34 billion compared to Rs336 billion in February, as lower interest rates continued to support demand from buyers of new vehicles.

At the same time, sales of cars, sports utility vehicles, pick-ups and vans stood at 15,531 units in March. This represented an increase of 40 per cent from the same month a year earlier, but a decline of 9 per cent from February.

The month-on-month drop was led by a 23 per cent fall in sales by market leader Pak Suzuki, while Hyundai Nishat’s sales were down 9 per cent over the previous month in March. Other assemblers, however, recorded month-on-month growth ranging between 1 per cent and 29 per cent.

With these numbers, cumulative sales in the first nine months of FY26 reached 144,029 units, showing a 43 per cent increase year-on-year.

Imports of kits remain strong

Local assemblers continued importing completely knocked down and semi-knocked down kits at a firm pace despite geopolitical tensions. Imports of these kits rose to $170 million in March from $157 million in February.

For 9MFY26, the import bill for these kits increased by 116 per cent year-on-year to $1.471 billion, indicating a positive sales outlook for the coming months.

The Middle East war began on Feb 28, but this did not halt the momentum in kit imports by local assemblers.

Analysts see support from lower rates

Some auto analysts expect auto sales to maintain positive momentum during 2026, with lower interest rates seen as a key support factor. Higher petroleum prices have also encouraged many consumers to shift towards new electric vehicles in March and in the current month.

Ajeet Kumar of BMA Capital Management said the month-on-month decline in March auto sales was linked to fewer working days because of Ramadan and Eid holidays. He also said the geopolitical climate may have affected the industry’s supply chain, which in turn influenced sales during the period.

He said auto sales were expected to gradually normalise, with volumes recovering towards more sustainable levels. However, he added that near-term momentum may remain subdued because of the economic fallout from the Iran-US conflict, which, he said, has increased inflationary pressures.

The latest figures therefore showed a mixed picture for the sector in March: financing continued to expand and yearly sales remained significantly higher, but monthly sales slowed even as imports of assembly kits pointed to continued activity in the market.