KARACHI: Outstanding auto loans in Pakistan rose for the 13th consecutive month, reaching Rs319 billion at the end of December 2025, up from Rs318 billion in November, according to data from the State Bank of Pakistan (SBP).
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The December growth was modest compared to previous months, as many buyers delayed vehicle purchases due to the change in model year and new registration processes. Despite this, the recovery remains below levels seen in June 2022, when annual car sales peaked at around 240,000 units and auto financing reached Rs368 billion.
Mohammed Sohail, CEO of Topline Securities, said that new model launches and falling interest rates are likely to sustain auto financing, even with the Rs3 million loan cap. Auto sales, including cars, SUVs, pickups, and vans, grew 46 percent during the first half of FY26 to 88,322 units, up from 60,676 units in the same period last year. This growth is supported by new market entrants, easing inflation, and improving macroeconomic sentiment.
Imports of semi-knocked down (SKD) and completely knocked down (CKD) kits surged 144 percent to $982 million in the first half of FY26, up from $402 million a year earlier, despite efforts to increase local manufacturing. Sazgar Engineering Works Ltd announced it will start bookings for its CKD TANK-500 Hi4-T 4X4 2.0L Turbo PHEV and HEV models from January 26.
Azeem Akhundzada of Sherman Securities said market competition has intensified with the launch of JAECOO’s J5 HEV at Rs7.6 million, making it the most affordable HEV SUV in Pakistan. The model competes directly with vehicles like HAVAL Jolion HEV, HR-V HEV, Corolla Cross HEV, KIA Sportage HEV, and even high-end sedans such as Toyota Altis.
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With SUVs dominating recent launches and price competition emerging as the key differentiator, analysts expect Pakistan’s passenger vehicle market to remain highly competitive for the foreseeable future.