Local automakers voice concerns as imports of used cars surge in Sept

Islamabad, Pakistan experienced a surge in the import of used cars in September following the easing of regulations, prompting criticism from domestic automakers. They argue that this move could stifle competition in the auto sector. Prior to September, used car imports had declined due to the abolition of the Personal Baggage Scheme and restrictions to prevent misuse by overseas Pakistanis.

In September, a total of 2,276 vehicles were imported under the Gift Scheme, reflecting a significant increase from May, when only 48 used cars were imported. From June to September, the number of imported vehicles grew, with 843, 1,938, 1,445, and 2,276 vehicles imported respectively. A senior auto industry executive noted that the 20-25% reduction in duties on completely built units (CBUs) in the 2026-27 budget has lowered import costs, contributing to the surge in imports.

This business growth, however, adversely affects locally produced cars, which contain up to 60% local parts and generate significant jobs. Abdul Rehman Aizaz, chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), expressed concern over the unfairness of the situation, as the auto policy slashes import duties on new cars while promoting used car imports.

Importers defend the practice, stating that it aligns with government regulations and is necessary for a competitive economy. They also mentioned that Pakistan's auto sector is still waiting for the entry of new entrants, particularly from China, and that Japanese car assemblers have not yet adapted to the competitive market. The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) supports the government's changes in vehicle import regulations and expects used car imports under the Gift Scheme and commercial imports to continue growing in the coming months.