Industry claims Rs50b loss from car imports
Auto industry is witnessing slowdown due to multiple price revisions of vehicles coupled with rising automobile financing rates, higher inflation and soaring fuel costs. PHOTO: FILE
Pakistan's auto industry has expressed its dismay over the rising import of used cars, which is said to have caused a loss of Rs50 billion during the last one year.
Pakistan is the only auto manufacturing country in Asia where used vehicles swallow a significant part of the market, accounting for nearly 25% of domestic sales between December 2024 and December 2025.
In comparison, the share of used cars remains negligible in regional peers: India has virtually zero used car inflows, Vietnam has 0.3% used car share and Thailand has 1.2%.
Industry analysts say the contrast underscores a clear policy divergence. While regional economies have restricted used car imports to safeguard their automotive value chains, Pakistan has charted an opposite course, especially after Notification 1895 issued by the Ministry of Commerce on September 30, 2025, which allowed imports of up to five-year-old vehicles. After June 2026, this limit may reportedly be removed entirely, potentially opening the floodgates to large-scale inflows of aged vehicles.
Pakistan's auto sector comprises roughly 1,200 factories, provides 2.5 million jobs, generates Rs500 billion annually in government revenue and holds $5 billion in foreign investment.
"Import-friendly policies risk diluting these gains at a time when industrial revival and localisation are declared priorities," said Shehryar Qadir, Senior Vice Chairman, Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam).
Of the 45,758 vehicles imported into Pakistan during the period December 2024 to December 2025, nearly 99% originated from Japan – a right-hand-drive market compatible with local driving conditions. The remaining numbers were negligible: 130 units from Thailand, 55 from the US, 49 from Jamaica, 47 from Germany, 22 from Australia, 20 from China and just five from the UAE.
Former Paapam chairman Abdul Rehman Aziz noted the lack of coordination between the State Bank of Pakistan, the Federal Board of Revenue and provincial excise departments, citing cases where vehicles were imported under one individual's name but registered in the name of another.