Auto Financing Hits 33-Month High Since 2022

Pakistan’s automotive sector is finally seeing a strong recovery, fueled by a stable economic environment. 

In November 2025, auto financing surged to Rs. 318 billion, a massive leap from Rs. 235 billion in the same month last year, reflecting a 36% YoY and 1% MoM increase. However, it remains 14% below the peak of Rs. 368 billion recorded in June 2022, Topline Securities reported.  

A major factor is the interest rate, which has been steadily declining and stabilized at 11% from May 2025 until mid-December this year, as per the Trading Economics graph, giving buyers the clarity and confidence they needed to head back to showrooms.

Foreign Investment Lags Behind

While local showrooms are seeing more activity, international investors remain hesitant. Foreign Direct Investment (FDI) in the transport and automotive sectors appears to be growing only slowly. In November, the industry attracted $5 million (approx. Rs. 1.4 billion), only a 5% increase from last year.

The Bottom Line

The contrast is sharp; the 35.5% spike in auto financing shows a domestic market eager to spend, backed by a stable interest rate. However, the modest 5% rise in foreign investment is worth noting. We have a thriving local buyer base, but to truly unlock the sector’s potential, policymakers need to convince global players that Pakistan is a secure, long-term destination for their capital.