Used Car Imports Surge In September As Automakers Raise Alarm

Used car imports rose sharply in September after changes in import regulations, triggering fresh concern among local automakers and parts manufacturers who say the trend could weaken domestic production and investment.

According to Commerce Ministry data, 2,276 used vehicles were imported in September, with 2,238 of them arriving under the Gift Scheme. The rise follows a period of lower imports after the government abolished the Personal Baggage Scheme and imposed restrictions aimed at stopping misuse of overseas Pakistani vehicle import facilities.

The monthly trend shows a clear rebound. Only 48 used cars were imported in May, mainly through the baggage scheme. The number climbed to 843 in June, including 806 vehicles under the Gift Scheme, before reaching 1,938 in July and 1,445 in August.

Auto industry representatives say lower duties on completely built units in the 2026-27 budget have reduced import costs and encouraged renewed activity in used vehicle imports. One senior industry executive also claimed that the one-year restriction on transfer of ownership was not being enforced in some cities, allowing commercial activity to grow again.

Local parts makers argue that the rise in used car imports threatens a supply chain that includes 13 assemblers and more than 300 auto parts manufacturers. Abdul Rehman Aizaz, chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers, said locally produced cars include up to 60 percent local parts by value, averaging around Rs1.5 million per vehicle.

Using that estimate, he said the import of 2,276 used vehicles represented a loss of about Rs3.4 billion in local parts production. He argued that domestic manufacturing supports jobs and operates within the documented economy, while the used car business remains largely unregulated.

Importers reject the criticism and say the easing of rules can improve competition in Pakistan’s auto market. Mian Shaoib Ahmed, chairman of the All Pakistan Car Dealers and Importers Association, said used car imports are legal when carried out under government regulations and respond to real demand from buyers.

Ahmed said imported used vehicles are currently subject to pre-shipment inspections by accredited firms, mostly based in Japan. He also pointed to a September 30 Engineering Development Board notification that relaxes criteria for used vehicle imports, including removal of a minimum capital requirement for importers.

Under the revised arrangement, any tax-registered individual or firm can import vehicles even if not registered with the Securities and Exchange Commission of Pakistan. The inspection process is also being shifted through the Pakistan Standards and Quality Control Authority, though officials say inspections will be handled by registered inspection agencies rather than directly by the authority.