KARACHI: Auto loans in Pakistan rose for the 14th straight month, reaching Rs328 billion in January 2026, up from Rs319 billion in December 2025. According to State Bank of Pakistan data, more consumers took loans due to new car models and registrations. Growth in December had slowed but picked up again in January. The auto loan peak was Rs368 billion in June 2022, when annual car sales hit around 240,000 units. Auto expert Mashood Ali Khan said, “The current trend shows consumers are increasingly leveraging bank financing to purchase vehicles, contributing to a gradual recovery in automobile sales despite prevailing economic challenges.” He added, “This is a strong indicator that consumer demand still exists, and it only needs supportive policy to accelerate further.” Most growth comes under the State Bank’s Rs3 million auto loan cap, which allows many middle-income buyers to own vehicles. Khan believes, “The auto sector holds significantly greater potential if financing limits are revised upward to Rs6 to Rs7m.” Raising limits would boost sedan and mid-range vehicle sales, now limited by current financing caps. “If financing ceilings are increased and interest rates continue to ease, Pakistan’s annual auto sales could potentially cross 200,000 units a year again,” he said. Small cars benefit the most, fitting well under the Rs3 million cap. Some customers combine partial financing with personal savings to buy sedans. Banks offer more flexible loans with lower markup, smaller down payments, and easier repayments, supporting recovery. Khan urged, “Policy alignment is essential to unlock the sector’s full potential.” He noted that raising loan limits would drive industrial growth, job creation, vendor development, and more government tax revenue. Interest rate moderation is also expected to help lending in coming months. He stressed, “Revising financing limits remains the single most impactful policy intervention to accelerate growth.” Car sales are expected to stay strong with a 137% jump in imports of semi- and completely knocked-down kits reaching $1.144 billion in the first seven months of fiscal 2026, compared to $706 million last year.