Used car imports fall sharply

KARACHI: The government's recent decision to discontinue the baggage scheme for used car imports and implement mandatory pre-shipment inspections for gifted and resident-transferred vehicles is proving fruitful, as arrivals in this category are declining. Indus Motor Company (IMC) reported that used vehicle imports fell to about 38,000 units in FY26, down from 42,000 units in FY25.

These policy changes are anticipated to further reduce the influx of used-vehicle imports in the future, enabling better utilization of the domestic automotive industry's production capacity. Despite this improvement, used vehicles still make up 19% of total sales, according to the Pakistan Automotive Manufacturers Association (PAMA), signifying a substantial portion of the domestic market.

However, Pakistani consumers now have access to 31 brands and over 100 locally assembled models, providing a diverse range of choices across all major segments. The domestic auto industry is presently operating at less than 50% of its installed production capacity, leaving considerable manufacturing capacity underutilized. IMC believes that enhanced capacity utilization will boost value addition, generate employment, expedite localization, strengthen the vendor base, and increase the sector's contribution to Pakistan's GDP.

According to Mian Shoaib Ahmed, Patron-in-Chief of All Pakistan Car Dealers and Importers Association (APCDIA), no used vehicles have arrived since the abolition of the baggage scheme, and gifted vehicle imports are also minimal. When questioned about whether overall automobile imports are increasing, Ahmed stated that this is due to rising imports of new cars.

According to data from the Pakistan Bureau of Statistics (PBS), CBU unit imports surged by 36% to $377.7 million in FY26, up from $278 million in FY25. In July, CBU imports decreased to $57 million from $70 million in June, while imports were $33 million in July 2025. Several new entrants are importing new CBU models, especially electric vehicles, to assess consumer response before transitioning to local assembly. Consequently, imports of new vehicles are rising.