Pakistan Auto Policy Shift Boosts Local Manufacturing, Ends Used Car Imports
Pakistan’s Pakistan auto policy shift is reshaping the country’s auto industry. The government has decided to end used car imports under the baggage scheme. This move will support local manufacturers and reduce idle production capacity.
Industry leaders have welcomed the decision with optimism. For example, Indus Motor Company praised officials for taking strong action. They believe this change will drive growth and improve stability in the sector.
Impact on Local Auto Industry
This policy will increase demand for locally assembled vehicles. As a result, companies can raise production and use their capacity more efficiently. In addition, the shift can create new jobs across the value chain.
Ali Asghar Jamali, CEO of Indus Motor Company, supported the decision. He said the policy will strengthen the domestic market and reduce reliance on imports. Therefore, businesses can invest with greater confidence.
However, the market will adjust to this shift. Around 50% of demand from used imports may move to the CKD segment. This change equals over 21,000 units shifting into local production.
Decline in Used Car Imports
In FY2025, Pakistan imported 42,125 used cars under different schemes. The baggage scheme alone brought in 35,806 units. However, the government abolished this category in January2026.
Other schemes were also added to imports. For instance, 4,634 vehicles came through the gift scheme. Meanwhile, 1,685 units arrived under the transfer of residence scheme.
As a result, the Pakistan auto policy shift marks a major turning point. It promotes local manufacturing and supports long-term growth. In the coming years, this move may reshape the entire automotive sector.
