Auto Industry Raises Concerns Over Misused Import Programs
Pakistan’s automotive industry has raised alarms over the misuse of import schemes, particularly those meant for overseas Pakistanis, which is affecting the local industry.
Industry insiders with DAWN argue that the increasing influx of used cars, brought into the country under schemes like “baggage,” “gift,” and “transfer of residence,” is damaging local vehicle production and threatening jobs.
Former chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAPAAM), Nabeel Hashmi, reported that domestic car production, which peaked at 325,000 units in 2020, has now fallen to between 150,000 and 175,000 units annually.
The decline in production is attributed to factors such as high taxes, financing difficulties, and a shift toward used vehicles, which are easier to import.
A major concern is that the import schemes, designed initially to benefit overseas Pakistanis, are being exploited to bring in used cars. These are then sold in the local market, undermining demand for locally made vehicles.
Recent data from PAPAAM shows that Pakistan accounts for 24% of the region’s imports of completely knocked down (CKD) and used vehicles, far higher than countries like India (0%), Vietnam (0.3%), and Thailand (1.2%).
Between December 2024 and October 2025, Pakistan imported 45,758 cars from Japan alone, along with others from countries such as Thailand (130), the US (55), Jamaica (49), Germany (47), Australia (22), China (20), and the UAE (5).
This flood of imports is harming local vehicle manufacturing, and industry representatives are calling on the government to regulate these schemes to protect domestic production.
PAPAAM’s former chairman, Amir Allahwala, further explains his concerns, stating that if these issues are not addressed, the local automotive sector could face further job losses and reduced investment in domestic manufacturing.
