Pakistan’s auto parts manufacturers have called on the government to remove the State Bank of Pakistan’s Rs. 3 million ceiling on car financing, citing the restriction as a key factor dampening consumer demand and slowing recovery in the domestic automobile sector. The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) highlighted the issue during a visit by Federal Minister for Commerce Jam Kamal Khan to the Bin Qasim automotive cluster in Karachi, where industry leaders outlined the challenges affecting local producers.
PAAPAM officials explained that the current financing cap has made it increasingly difficult for many consumers to purchase new vehicles, particularly amid the sharp rise in car prices in recent years. They argued that relaxing these limits would not only stimulate vehicle sales but also support domestic vendors and help the automotive industry return to a growth trajectory. According to PAAPAM, easing access to auto financing would allow manufacturers to meet rising consumer demand while strengthening local supply chains and enhancing overall economic activity.
During his visit, Jam Kamal Khan toured several manufacturing facilities, including Tecno Auto Glass Factory and production units at Pak Suzuki Motor Company. The minister observed various operations, including the press shop, injection moulding section, and engine and transmission plants, where officials briefed him on localization efforts and the expansion of domestic production capabilities. Khan praised the quality of production, noting that internationally competitive automotive components are now being manufactured within Pakistan, contributing to GDP, creating jobs, and facilitating technology transfer.
The commerce minister expressed confidence in the potential for local vehicle sales to grow, particularly as government policy discourages the import of used cars. He highlighted that Pakistan’s current annual vehicle production, which stands below 200,000 units, could expand significantly, potentially reaching between 500,000 and one million units with the right policy support and investment climate. Khan emphasized that expanding access to auto financing would be a critical driver of this growth, enabling more consumers to purchase locally produced vehicles and unlocking the industry’s economic potential. By linking consumer financing, industrial capacity, and government policy, the ministry and PAAPAM aim to create an environment conducive to sustainable growth for Pakistan’s automotive sector.
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