Car Imports Surge 36% as New Entrants Expand Ahead of Local Assembly

Car imports surged by 36 percent in July and August 2026 compared to the same period in the previous year, according to Pakistan Bureau of Statistics data. The increase was driven by new and used vehicle imports, which rose to $81.4 million from $59 million during the same months a year earlier. The Pakistani government abolished the baggage scheme for used car imports in January and began implementing mandatory pre-shipment inspections for vehicles imported under gift and transfer of residence schemes.

Indus Motor Company, a local automaker, reported a noticeable decline in used vehicle imports, falling to approximately 38,000 units in fiscal year 2026 (FY26) from 42,000 units in FY25. This decline occurred after the government abolished the baggage scheme. However, concerns persist among auto vendors, who believe used car dealers are still managing imports through various schemes.

In May, used vehicle imports reached around 48 units, followed by 843 units in June, 1,938 units in July, and 1,445 units in August. Aamir Allawala, the former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers, stated that leading Chinese companies were importing between 1,500 and 2,000 new energy vehicles per month. Used car imports totaled around 3,200 units in July and August combined.

Allawala highlighted that several locally assembled vehicles possess more than 50 percent local content by value, with an average price of around Rs. 1.5 million per vehicle. He emphasized that imports of completely built-up vehicles, whether new or used, have led to a reduction in demand for locally produced auto parts, negatively impacting employment within the vendor industry. Allawala urged the government to prioritize job creation and the preservation of Pakistan's industrial base as its topmost concerns.