What happened
According to Dawn, used car imports into Pakistan surged during September following a relaxation of import regulations. The rise has drawn criticism from local automakers and parts manufacturers, whereas car importers contend that the influx brings necessary competition to the domestic automotive sector.
Imports had briefly dropped after the government ended the Personal Baggage Scheme and restricted used car programs for overseas Pakistanis. However, import numbers rebounded rapidly, largely driven by transactions under the Gift Scheme.
Key facts
- According to Commerce Ministry figures, used car imports grew from 48 vehicles in May to 843 in June, 1,938 in July, 1,445 in August, and reached 2,276 in September (including 2,238 under the Gift Scheme).
- A senior auto industry executive noted that a 20 to 25 percent reduction in duties on completely built units in the 2026-27 budget lowered import costs, adding that a one-year ownership transfer limit is going unenforced in some cities.
- Abdul Rehman Aizaz, chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), stated that domestic vehicles contain up to 60 percent local parts by value (averaging Rs1.5 million per car), meaning September's imports caused a loss of Rs3.4 billion to local parts manufacturing.
- Mian Shoaib Ahmed, chairman of the All Pakistan Car Dealers & Importers Association, stated that imported vehicles undergo pre-shipment inspections in Japan by accredited companies and fulfill local demand.
- An Engineering Development Board notification dated September 30 removed the minimum capital requirement for importing companies, permitting any tax-registered individual or firm to import used vehicles. Full details on implementation were not specified in the source; please check the official notice.
Why it matters
According to Dawn, domestic automotive manufacturers argue that rising used car imports threaten an industry that includes 13 local assemblers and over 300 auto parts manufacturers. Paapam warned that lowering import duties while encouraging used car imports damages local manufacturing, jobs, and the documented economy.
On the other hand, importers argue that Pakistan requires a competitive economy. They noted that Japanese car assemblers in Pakistan are not yet prepared for a competitive market and new Chinese entrants have not yet established a strong presence.
Source: Dawn - Home · Published October 03, 2026 · Photo by James Frewin on Unsplash