The local auto industry is sounding the alarm over a steep surge in used-car imports, which it argues has cost nearly Rs 50 billion over the past year.

According to industry insiders:

Imported used cars now account for about 25 % of all vehicles sold in Pakistan between December 2024 and December 2025.
By contrast, neighbouring auto-producing countries keep used-car inflows exceedingly low: e.g., virtually 0 % in India, just 0.3 % in Vietnam, and around 1.2 % in Thailand.

The surge follows a regulatory change: a September 2025 notification now allows imports of cars up to five years old — with reports that after June 2026, even that ceiling may be dropped.

Representatives of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) warn that the influx of used cars is undermining decades of investment: about 1,200 factories nationwide provide some 2.5 million jobs, contribute roughly Rs 500 billion annually in tax revenue, and depend on demand for locally manufactured components.

They argue that every used-car imported is a direct loss to the local supply chain — reducing demand for local auto parts, threatening small and medium-sized vendors, and jeopardising future investments in manufacturing and “Make-in-Pakistan” goals.

What This Means Going Forward

Unless policies change, the increasing preference for cheaper used imports could further suppress local assembly plants — leading to job losses and underutilised industrial capacity.

With a large share of local auto-parts production becoming redundant, many SMEs might face shutdowns or financial distress.

The long-term viability of the domestic automotive sector — and its contribution to employment and GDP — could be eroded, reversing years of industrialisation efforts in favour of short-term consumer gains.