Pakistan’s auto parts manufacturers have called on the government to lift the State Bank of Pakistan’s Rs. 3 million ceiling on car financing, saying the restriction is dampening consumer demand and slowing recovery in the local automobile sector.
The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) raised the issue during a visit by Federal Minister for Commerce Jam Kamal Khan to the Bin Qasim automotive cluster in Karachi, where industry representatives outlined the challenges facing domestic producers.
PAAPAM officials said the financing cap has made it difficult for many buyers to purchase new vehicles, particularly as car prices have risen sharply in recent years. They argued that more flexible financing would stimulate sales, support local vendors, and help the industry return to a growth trajectory.
During the visit, the commerce minister toured several manufacturing facilities, including Tecno Auto Glass Factory and production units at Pak Suzuki Motor Company. The tour included the press shop, injection moulding section, and engine and transmission plants, where the minister was briefed on localization efforts and the expansion of domestic manufacturing capabilities.
Jam Kamal Khan praised the quality of production and said it was encouraging to see internationally competitive automotive components being produced within Pakistan. He noted that the sector plays a vital role in economic activity by contributing to GDP, creating jobs, and facilitating the transfer of modern manufacturing technologies.
The minister expressed confidence that local vehicle sales would improve in the coming years, particularly as government policy continues to discourage the import of used cars. He said this approach would help protect domestic manufacturers and strengthen the local supply chain.
Looking ahead, Jam Kamal Khan said Pakistan’s annual vehicle production, currently below 200,000 units, has the potential to grow significantly, possibly reaching between 500,000 and one million units, if the right policy support and investment climate are maintained.
He added that expanding access to auto financing would be a key factor in driving future growth, enabling more consumers to purchase locally produced vehicles and helping the industry unlock its full economic potential.
