Auto Policy 2026-31: PAAPAM seeks safeguards against used-car imports

LAHORE: The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has appealed to Prime Minister Shehbaz Sharif, along with key government leadership, including the finance minister, minister for industries & production, and relevant authorities, to retain essential safeguards against the misuse of used-car import schemes in the final Auto Policy 2026-31.

PAAPAM Chairman Usman Aslam Malik, in a statement on Tuesday, warned that removing key protections, specifically the proposed one-year mandatory non-transfer condition on vehicles imported under overseas schemes, would severely damage the domestic automotive sector and reverse progress on documenting the national economy.

Highlighting key impacts of removing protections in the auto policy, he said unregulated imports jeopardize 1.8 million jobs supported by the local auto parts manufacturing sector while every imported used car displaces nearly PKR 1.5 million worth of locally manufactured components.

About economic scale & informal market, he pointed out that annual used-car imports reached approximately 50,000 units last year, capturing nearly 30 percent of the domestic market and generating an estimated PKR 200 billion black-money ecosystem. Regarding the compounding tariff pressure, the PAAPAM chairman highlighted that under the National Tariff Policy 2025-30, duties on used cars face gradual reductions, dropping from a 40 percent premium above new cars in FY26 down to zero by FY30. Coupled with recent Customs duty cuts to 30 percent on new CBU vehicles (850cc or below) in the 2026-27 budget and depreciation factors up to 36 percent, imported used cars are becoming increasingly profitable for commercial traders. He cautioned that removing the one-year non-transfer restriction will decimate local manufacturers, who supply up to 65 percent of parts by value to domestic assemblers.

The PAAPAM urged the prime minister to preserve the one-year non-transfer rule, ensuring overseas facilitation schemes benefit genuine beneficiaries rather than commercial dealer networks.

Copyright Business Recorder, 2026