Self-financing hits record 285 billion rupees – Journal
KARACHI: Strong consumer demand took self-financing to an all-time high of 285 billion rupees in March, a 30% increase year-on-year or 66 billion rupees, the director of Topline Securities Mohammad Sohail.
Citing figures released by the State Bank of Pakistan, he added that self-financing recorded the largest monthly increase of 12 billion rupees or 4.5% in March.
As of February 28, 2021, self-financing had reached an all-time high of 273 billion rupees, he added, attributing the auto financing boom to interest rates that were low at 7% this year from 13.5%. in March 2020.
As car prices have increased dramatically, buyers are more interested in buying cars through cheap bank financing due to the low interest rates.
âI think the average share of auto financing in the country’s total car sales is 50%,â he said.
When asked if people are investing in cars because they have enough cash on hand due to the decrease in overseas travel amid the Covid-19 pandemic, he said: âMaybe some people take advantage of the situation, but one thing is certain that the local buyers Assembled cars are only upper middle and high income people instead of the lower middle class. ”
Despite improving automotive demand, the total sales volume of imported cars, light commercial vehicles (LCVs), used and new vehicles would be between 200,000 and 225,000 units at the end of the current fiscal year, which cannot compete with the figures of 2017 when total sales had hit 350,000 units.
Barring a slight decline in heavy-duty vehicle sales, the entire auto industry saw positive growth in the nine months of the current fiscal year (9MFY21), with car sales up 31.5 %, followed by 157.6% jeeps and 41.4% light commercial vehicles and microphones. Newcomers like Hyundai and Kia are also doing booming business.
As demand for cars and other vehicles soars, assemblers have yet to announce price cuts for vehicles despite the rupee’s upward journey from August 2020 against the US dollar. . In August, one dollar was equivalent to Rs 168.78 while it is currently equivalent to Rs 151-152, indicating low cost of imported parts and accessories.
Posted in Dawn, April 20, 2021