CCP flags Rs60 billion impact of used car imports on auto industry

The Competition Commission of Pakistan has raised concerns over the country’s used car import regime, stating that imported vehicles led to an estimated Rs60 billion loss to the domestic auto industry and displaced more than 40,000 potential jobs in FY25.

In its latest study on the automobile sector, the commission reported that more than 38,000 used cars were imported during FY2025, accounting for nearly 25 percent of total passenger vehicle sales. It noted that personal import schemes meant for overseas Pakistanis under Gift, Transfer of Residence and Baggage categories have been used for commercial purposes, affecting local production and localization.

The report states that each imported used vehicle replaces demand for a locally assembled unit and its domestically manufactured components. It warned that continued reliance on imports could weaken the country’s industrial base and expand the structural import bill.

The commission said Pakistan’s domestic auto parts industry currently saves about $1.25 billion annually through import substitution. It added that local automobile manufacturing contributes around Rs302 billion each year in taxes, including general sales tax, customs duties and income tax, and that a shift toward imports could reduce this revenue over time.

The study also reviewed historical trends, noting that vehicle production grew between 1999 and 2007 before liberalised used car imports disrupted output. Between 2005 and 2010, five assembly plants closed and around 40 percent of installed capacity remained idle, while global assemblers including Hyundai Motor Company, Nissan Motor Corporation, Chevrolet and Fiat exited the market.

To address the issue, the commission has recommended limiting personal import schemes to genuine use, strengthening enforcement, introducing a structured import mechanism through authorised dealers and allowing only environmentally compliant vehicles under a stable and transparent policy framework.