Local Auto Industry Claims Rs50bn Loss as Used Car Imports Surge
Pakistan’s auto industry has warned of a deepening crisis after claiming losses of Rs50 billion over the past year, a development it links to an apparent surge in imported used vehicles. The figures, reported by The Express Tribune, reflect what manufacturers describe as a policy-driven disruption that is rapidly reshaping the automotive market.
Industry data shows that used and reconditioned cars made up nearly 25% of total car sales between December 2024 and December 2025, a share that industry insiders say is unprecedented. Comparable automotive markets in the region keep used-car import penetration below 2%, mainly through stricter rules and stronger domestic production.
Policy Shift Sparks Surge
Manufacturers largely attribute the spike in imports to the Ministry of Commerce Notification 1895, issued in September 2025, which extended the permissible age for used vehicles to 5 years. The government has defended the measure as a way to offer relief to consumers priced out of an increasingly expensive new-car market.
However, auto assemblers argue that the policy has opened the door to mass inflows. They are particularly alarmed by a proposal reportedly under consideration to remove the age limit entirely after June 2026, which they warn could trigger a wave of older, cheaper vehicles that domestic plants cannot compete with.
Industry Stakes and the Rs50bn Claim
Pakistan’s auto ecosystem comprises around 1,200 factories and supports 2.5 million jobs along the supply chain. Industry groups say reduced demand for new vehicles has already led to production cuts, declining orders for parts makers, and shrinking plant utilisation rates.
The claimed Rs50bn loss figure reflects cumulative effects: reduced sales, lower production volumes, and pressures on suppliers. While the number has not been independently verified, the underlying trend (weakening output and rising idle capacity) is observable across the sector.
Rethinking the Debate
The current crisis exposes broader structural issues within Pakistan’s auto industry. Localisation remains limited, model diversity is narrow, and the segment has long been criticised for slow innovation. The import surge, some analysts argue, is not merely undermining the industry — it is exposing its inability to evolve.
Still, unfettered imports also carry risks. Heavy reliance on foreign vehicles could reduce local production to a token scale, dismantling decades of investment and shaking a manufacturing base that supports millions of livelihoods. Once domestic capacity erodes, rebuilding it becomes politically and economically expensive.
What Happens Next?
If the government removes the import age limit in 2026, Pakistan could see a rapid shift toward an import-dominant automotive market. A more balanced approach, i.e, maintaining moderate age limits, improving regulatory standards, and incentivising competitive local production, may offer a middle path.
For now, the Rs50bn loss claim is more than an industry grievance. It is a warning signal about the future direction of Pakistan’s automotive economy, and whether the country chooses to manufacture cars or merely import them.
