ISLAMABAD, October 3 — Pakistan imported 2,276 used vehicles in September under the Gift Scheme, according to Commerce Ministry data, marking a sharp rise from May’s low of just 48 vehicles mainly through the Baggage Scheme. The surge began in June with 843 vehicles imported (806 under Gift Scheme), rose to 1,938 in July (1,876 under Gift Scheme), dipped slightly to 1,445 in August, then jumped to 2,276 in September, of which 2,238 were under the Gift Scheme.
This trend follows the easing of regulations after a prior decline caused by the government’s abolition of the Personal Baggage Scheme and restrictions aimed at curbing misuse of used car schemes for overseas Pakistanis. Local automakers and auto parts manufacturers have voiced strong concerns, citing the 2026-27 federal budget’s reduction of duties on completely built units (CBUs) by 20-25 percent, which has lowered import costs.
A senior auto industry executive warned that a one-year restriction on transfer of ownership for imported used vehicles is not being enforced in some cities, allowing the market to flourish at the expense of domestic industry, which includes 13 vehicle assemblers and over 300 auto parts manufacturers. Abdul Rehman Aizaz, chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), stated that locally produced cars contain up to 60 percent local parts by value, averaging Rs1.5 million per vehicle.
He argued that the import of 2,276 used vehicles in September alone resulted in a loss of Rs3.4 billion in local parts production, undermining job creation and the documented economy. Aizaz criticized the policy contradiction of slashing import duties on new cars while encouraging used car imports, warning that Pakistan risks becoming a market dominated by imported vehicles with no industrial base.
In contrast, importers, represented by Mian Shaoib Ahmed, chairman of the All Pakistan Car Dealers & Importers Association and a member of the FPCCI executive committee, argued that used car imports are legal under government regulations and necessary for a competitive economy. Ahmed noted that all imported vehicles undergo pre-shipment inspections by accredited Japanese firms, as most used cars originate from Japan.
He highlighted demand for used cars in Pakistan, pointed to the lack of market impact by new Chinese entrants, and noted that Japanese assemblers in Pakistan are not yet ready for competition. Ahmed praised recent changes to the vehicle import regime, citing an Engineering Development Board (EDB) notification dated September 30 that relaxed import criteria by removing the minimum capital requirement for companies importing used vehicles, now allowing any tax-registered individual or firm to participate, even if not registered with the Securities and Exchange Commission of Pakistan.
He predicted continued growth in used car imports under both the Gift Scheme and commercial channels in the coming months.
