Used car imports plunge in Pakistan

KARACHI: Imports of used vehicles into Pakistan have declined significantly following government measures aimed at restricting the inflow of second-hand cars and supporting the domestic automobile industry.

The government abolished the baggage scheme for used-car imports in January and introduced mandatory pre-shipment inspections for vehicles brought into the country under gift and resident-transfer schemes. The measures have since resulted in a noticeable reduction in used-vehicle arrivals.

According to Indus Motor Company’s FY26 annual report, around 38,000 used vehicles were imported during the financial year, down from approximately 42,000 units in FY25.

The company expects the stricter import policies to further reduce used-vehicle inflows in the coming years. It said this could help local automakers make better use of their existing production capacity.

Despite the decline, used imported vehicles still represent around 19 per cent of total automobile sales, according to industry data. The share remains substantial despite the growing availability of locally assembled vehicles.

Pakistan’s domestic automobile industry currently operates at less than half of its installed production capacity. Industry stakeholders believe higher utilisation could boost local value addition, create employment, expand the vendor network and increase the sector’s contribution to the national economy.

Meanwhile, automobile imports overall have increased due to growing shipments of new vehicles. Data from the Pakistan Bureau of Statistics shows that imports of completely built-up vehicles rose 36 per cent to $377.7 million in FY26, compared with $278 million in the previous financial year.

CBU imports stood at $57 million in July, down from $70 million in June, but remained significantly higher than the $33 million recorded in July 2025.

The increase is partly linked to new automobile companies entering the Pakistani market. Several firms are importing fully built new models, particularly electric vehicles, to assess local consumer demand before considering domestic assembly.

As used-car imports decline under tighter regulations, the rising number of new vehicle imports is reshaping Pakistan’s automobile market and increasing competition among local and international manufacturers.