Imports of used cars surged in September after easing of regulations, inviting criticism from local manufacturers while importers claim that the move will bring competition in the auto sector.
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move → use → sector
After a brief decline due to the government abolishing the Personal Baggage Scheme and applying restrictions to control misuse of used car schemes for overseas Pakistanis, imports of used cars have started surging again.
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imports → abolish → cars
In the month of September, a total of 2,276 vehicles were imported under the Gift Scheme as the strict restrictions under the Baggage Scheme continue, according to data from the Commerce Ministry.
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restrictions → import → Ministry
The figures show that in May, only 48 used cars were imported mainly through the baggage scheme.
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cars → show → scheme
However, the situation started to change from June onwards.
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situation → start → June
In June, a total of 843 vehicles were imported, including 806 under the Gift Scheme.
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total → import → Scheme
The figure reached 1,938 in July, with 1,876 cars under the Gift Scheme.
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figure → reach → Scheme
August saw a total of 1,445 vehicle imports, while 2,276 vehicles were imported in September, with 2,238 under the Gift Scheme.
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vehicles → see → Scheme
A senior executive of the auto industry noted that the reduction in duties on completely built units (CBUs) by 20-25 per cent in the 2026-27 budget has reduced the import cost.
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reduction → note → cost
“We have reports that a one-year restriction on transfer of ownership is not being implemented in some cities, due to which 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,” the executive added.
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executive → have → assemblers
Auto parts vendors expressed their concerns too, claiming that auto production had finally begun to show an increase after a gap of three years, which was also contributing to Pakistan’s growth in the large-scale manufacturing (LSM) sector.
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which → express → sector
“Locally produced cars contain up to 60pc local parts by value, amounting to an average of Rs1.5 million per vehicle, and import of 2,276 used vehicles meant loss of Rs3.4 billion of local parts production which creates jobs and operates in the documented economy,” said Abdul Rehman Aizaz, chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam).
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Aizaz → produce → Manufacturers
He termed it unfair that, on the one hand, the proposed auto policy was slashing import duties on new cars, while on the other hand, imports of used cars were being encouraged.
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imports → term → cars
“Ultimately, Pakistan is moving towards a market dominated by imported new and used vehicles with no industrial activity,” the Paapam chairman said, terming the business of used cars completely unregulated.
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chairman → move → cars
Competition in auto sector
On the contrary, importers claim that Pakistan needs to have a competitive economy and that importing used cars was completely legal if done as per the government regulations.
“Currently, all imported vehicles are subjected to pre-shipment inspections by the accredited companies based in Japan as most of the used cars are imported from that country,” said Mian Shaoib Ahmed, chairman of All Pakistan Car Dealers & Importers Association.
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Ahmed → claim → Association
Ahmed, also a member of the Federation of Pakistan Chambers of Commerce & Industry’s (FPCCI) executive committee, stressed there was a demand for used cars in Pakistan.
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Ahmed → stress → Pakistan
He contended that new Chinese entrants have yet to make their mark in Pakistani markets, while Japanese car assemblers in the country were not yet ready for the competitive environment.
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assemblers → contend → environment
The FPCCI member lauded the government for recent changes in the vehicle import regime and added that used car imports under the Gift Scheme and commercial imports will continue to rise in the coming months.
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imports → laud → months
Ahmed referred to a notification by the Engineering Development Board (EDB), dated Sep 30, which would relax the criteria for imports of used vehicles.
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which → refer → vehicles
The changes in the recent EDB notification against the earlier notification included the removal of a clause for the minimum capital requirement of a company importing used cars, and now, any tax-registered individual or firm not even registered with the Securities and Exchange Commission of Pakistan (SECP) can import vehicles.
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individual → include → vehicles
The pre- and post-shipment inspection will be conducted through the Pakistan Standards and Quality Control Authority (PSQCA) instead of the EDB.
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inspection → conduct → Authority
However, the PSQCA chief executive officer said that inspection was not done directly under or by the authority, but through its registered inspection agencies.
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inspection → say → agencies
Currently, only two local inspection agents have been registered with the PSQCA; they are the representatives of firms accredited with the Japanese Foreign Principals Inspection Agencies.
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they → register → Agencies
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