KARACHI: More used cars are coming into Pakistan after the government relaxed its import rules. Local car makers are unhappy, but importers say the change will bring healthy competition.
Pakistan imported 2,276 used vehicles in September, according to Commerce Ministry data. Of these, 2,238 came in under the Gift Scheme. Rules under the Personal Baggage Scheme are still strict.
The rise comes after a short drop. The government had ended the Baggage Scheme and set limits to stop people from misusing used car programs meant for overseas Pakistanis. In May, only 48 used cars were imported, mostly through the baggage scheme. But numbers began to climb in June, when 843 vehicles arrived. They rose to 1,938 in July, then dipped to 1,445 in August before reaching September’s high.
A senior executive in the auto industry said the government cut duties on completely built cars by 20% to 25% in the 2026-27 budget, which made imports cheaper. He also said a rule that stops owners from selling an imported car for one year is not being followed in some cities. “This business is flourishing again, but at the cost of the domestic auto industry which consists of 13 assemblers and over 300 auto parts manufacturers,” he said.
Auto parts makers also voiced concern. They said car production had only just started to grow again after three years, which was helping the country’s large-scale manufacturing sector.
Abdul Rehman Aizaz, chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers, said locally made cars use up to 60% local parts by value. That comes to about 1.5 million rupees per car. By his estimate, September’s imports meant a loss of 3.4 billion rupees in local parts production. He said this work creates jobs and is part of the documented economy.
Aizaz said it was unfair that the proposed auto policy would cut duties on new car imports while used car imports were also being encouraged. He called the used car trade completely unregulated and warned that Pakistan was heading toward a market full of imported new and used cars, with no industrial activity at home.
Importers see it differently. They say Pakistan needs a competitive economy and that importing used cars is legal if the government’s rules are followed.
Mian Shaoib Ahmed, chairman of the All Pakistan Car Dealers & Importers Association, said every imported vehicle is checked before shipping by approved companies in Japan, where most used cars come from. Ahmed, who is also on the executive committee of the Federation of Pakistan Chambers of Commerce & Industry, said people in Pakistan want used cars. He argued that new Chinese car companies have not yet made their mark in the country, and that Japanese car makers in Pakistan are not ready for tougher competition.
He praised the government’s recent changes and said imports under the Gift Scheme and commercial imports will keep rising in the coming months.
Ahmed pointed to a Sept. 30 notice from the Engineering Development Board that makes it easier to import used cars. It removes the minimum capital a company needs to import them. Now any individual or firm registered for tax can import cars, even if it is not registered with the Securities and Exchange Commission of Pakistan.
The notice also says checks before and after shipping will be done through the Pakistan Standards and Quality Control Authority instead of the EDB. The authority’s chief executive officer said, however, that it does not carry out inspections itself. It uses inspection agencies registered with it. Only two local agents are registered so far, and both represent firms approved by the Japanese Foreign Principals Inspection Agencies.
