ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued a serious warning over the country’s used car import regime, revealing that imported vehicles caused an estimated Rs60 billion loss to the domestic auto industry and displaced more than 40,000 potential jobs in FY25 alone.
According to the CCP’s latest automobile sector study, over 38,000 used cars were imported during FY2025, accounting for nearly one-fourth of total passenger vehicle sales. The Commission observed that personal import schemes- originally designed for overseas Pakistanis under Gift, Transfer of Residence, and Baggage categories- have been widely misused for commercial purposes, undermining local manufacturing and localization efforts.
“Every imported used vehicle directly substitutes demand for a locally assembled vehicle and its locally manufactured components,” the report states, warning that continued reliance on imports threatens Pakistan’s industrial base.
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The CCP cautioned that declining local production would widen the structural import bill, intensify pressure on foreign exchange reserves, and increase macroeconomic vulnerabilities.
Pakistan’s domestic auto parts industry currently saves around USD1.25 billion annually through import substitution — a buffer that could erode if imports persist. The study also highlighted the fiscal impact. The local automobile value chain generates approximately Rs302 billion annually in taxes, including GST, customs duties, and income tax. Replacing domestic output with imports would weaken this broad tax base over time.
Historically, Pakistan’s auto production expanded rapidly between 1999 and 2007, but liberalized used car imports disrupted momentum, contributing to plant closures, idle capacity, and the exit of global assemblers. The fallout was severe, forcing several global assemblers — including Hyundai Motor Company, Nissan Motor Corporation, Chevrolet, and Fiat — to exit Pakistan, while five assembly plants shut down between 2005 and 2010 and nearly 40 percent of installed capacity remained idle.
To restore balance, the CCP has recommended restricting personal import schemes to genuine use, strengthening enforcement, introducing a structured import framework through authorized dealers, and limiting imports to environmentally compliant vehicles under a stable, transparent policy regime.
Copyright Business Recorder, 2026
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