Auto Financing Rises to Rs263B, Tariff Cuts Feared

Auto financing in Pakistan surged by 2% month-on-month and a robust 12% year-on-year, hitting Rs263 billion in April 2025, marking the fifth consecutive monthly rise—a glimmer of economic recovery. Yet, this figure lingers 28% below its peak of Rs368 billion from June 2022, revealing lingering challenges. The benchmark interest rate, now slashed to 11% after a prolonged 22% stint until June 2024, has boosted demand, driving more buyers toward auto leasing for both new and used vehicles.

However, the auto industry is sounding the alarm over the government’s planned tariff rationalisation under the National Tariff Policy for 2025-30, which proposes significant reductions in import duties across sectors. This comes as auto sales and financing gain momentum, raising fears of disruption. The Pakistan Association of Auto Parts Manufacturers (Paapam) has warned that the policy’s maximum 15% tariff could cripple local firms, exposing them to cheaper imports and risking the loss of up to 500,000 jobs, a devastating blow to the manufacturing sector.

Web context highlights the auto industry’s growth potential, with sales and production rising sharply in recent years, yet posts found on X reflect mixed sentiment—some celebrate the financing uptick, others dread tariff cuts’ impact. Critically, the narrative of “positive momentum” may mask vulnerabilities—web sources note past struggles with high interest rates and import competition, while X sentiment questions the government’s balancing act, suggesting job loss fears could be understated amid global trade pressures.