Imports of new and used cars rose sharply in the first two months of fiscal year 2026-27 as new entrants expanded vehicle imports ahead of local assembly, while auto vendors raised concerns over continued used car imports despite the government’s decision to abolish the baggage scheme.
According to Pakistan Bureau of Statistics data, imports of motor cars, including new and used vehicles, increased 36 percent to $81.4 million in July and August 2026 from $59 million in the same period a year earlier.
The government abolished the baggage scheme for used car imports in January and made pre-shipment inspections mandatory for vehicles imported under the gift and transfer of residence schemes. Indus Motor Company said in its FY26 annual report that used vehicle imports fell to around 38,000 units in FY26 from 42,000 units in FY25 after the baggage scheme was abolished.
However, former Pakistan Association of Automotive Parts and Accessories Manufacturers Chairman Aamir Allawala said vendors believed used car dealers were still managing imports through different schemes. He said 48 used vehicles were imported in May, followed by 843 in June, 1,938 in July and 1,445 in August. The gift scheme accounted for most imports in June, July and August.
Allawala said leading Chinese companies were importing between 1,500 and 2,000 new energy vehicles per month, while used car imports totaled around 3,200 units in July and August combined. He said several locally assembled vehicles had more than 50 percent local content by value, averaging around Rs. 1.5 million per vehicle.
He said imports of completely built up vehicles, whether new or used, reduced demand for locally produced auto parts and affected employment in the vendor industry. Allawala stressed that job creation and preservation of Pakistan’s industrial base should remain government priorities.
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