Pakistan Auto Industry Loses 50 Billion Rupees Amid Surge in Used Car Imports

Pakistan’s auto industry is raising concerns over the surge in used car imports, which has reportedly caused losses of Rs50 billion over the past year.

Between December 2024 and December 2025, nearly 25% of domestic vehicle sales were accounted for by used imports, making Pakistan the only auto-producing country in Asia with such a high share. In comparison, used car inflows remain minimal in regional peers, with India at almost zero, Vietnam at 0.3%, and Thailand at 1.2%.

Industry experts say this stark contrast highlights a significant policy difference. While neighboring countries have restricted used car imports to protect their automotive ecosystems, Pakistan relaxed rules through Notification 1895 issued by the Ministry of Commerce on September 30, 2025, allowing vehicles up to five years old. Reports suggest this age limit may be lifted entirely after June 2026, potentially triggering a further influx of older vehicles.

Pakistan’s auto sector is a cornerstone of the economy, comprising around 1,200 factories, providing 2.5 million jobs, generating Rs500 billion in government revenue annually, and attracting $5 billion in foreign investment.

Shehryar Qadir, Senior Vice Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam), warned that import-friendly policies could undermine these gains, especially as industrial revival and localization remain national priorities.

Of the 45,758 vehicles imported during the last year, nearly 99% came from Japan, compatible with local driving conditions, while the rest came from countries including Thailand, the US, Jamaica, Germany, Australia, China, and the UAE. Former Paapam chairman Abdul Rehman Aziz also highlighted coordination gaps between the State Bank of Pakistan, FBR, and provincial excise departments, noting instances where vehicles were imported under one name but registered under another.