ISLAMABAD, November 10, 2026: Used car imports into Pakistan continue despite stricter government regulations under the gift scheme, with more than 2,000 vehicles reportedly entering the country in October, raising concerns among local automobile parts manufacturers.
The continued inflow comes as the government seeks to tighten vehicle import procedures to prevent misuse of the scheme, while domestic manufacturers warn that increasing imports could undermine local production and investment.
According to automobile industry representatives cited by Dawn, imports under the gift scheme have remained substantial despite the introduction of additional restrictions.
Former Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) chairman Aamir Allawala said only seven vehicles were imported under the scheme in May 2026.
However, imports subsequently increased, reaching 2,238 vehicles in September before exceeding 2,000 units again in October.
Allawala said the continued increase suggested that importers were finding ways to operate despite the tighter regulatory framework.
Meanwhile, official data from the Pakistan Bureau of Statistics showed that imports of completely built-up (CBU) vehicles, including new and used cars, increased by 40% during the first quarter of fiscal year 2026-27.
The value of CBU imports reached $126 million, compared with $90 million during the corresponding period of the previous fiscal year.
Industry representatives said part of the increase reflected new automobile companies importing fully assembled vehicles to assess market demand before establishing local assembly operations.
However, domestic parts manufacturers expressed concern that rising vehicle imports and changes in the government’s automotive policy could weaken incentives for localisation.
According to industry estimates, locally assembled vehicles contain components worth approximately Rs1.5 million to Rs2.5 million produced by Pakistani manufacturers, supporting a network of around 1,200 automotive parts suppliers.
PAAPAM representatives said Japanese vehicles assembled in Pakistan currently contain approximately 50% to 65% locally manufactured components, compared with 20% to 25% in Korean models and up to 5% in many Chinese vehicles.
PAAPAM Chairman Abdul Rehman Aizaz warned that the proposed Auto Policy 2026-31 could increase foreign exchange outflows through imports of electric vehicles and completely knocked-down (CKD) kits.
He argued that reductions in import duties might lower vehicle prices by only 5% to 7%, while placing additional pressure on domestic component manufacturers.
The association also expressed reservations over changes in the final policy framework compared with proposals discussed during earlier consultations with the Ministry of Industries.
For consumers, continued imports could expand the availability of foreign vehicles, particularly Japanese models not officially marketed in Pakistan.
However, industry stakeholders maintain that the long-term impact will depend on effective enforcement of import regulations and the government’s ability to balance consumer choice with domestic manufacturing development.