During the initial half of the ongoing fiscal year, the influx of used cars into the market has skyrocketed by an astounding 684% when compared to the corresponding period of the previous year. Reports indicate that over 16,500 units of pre-owned vehicles were brought into the country between July and December 2023, marking a remarkable surge from the approximately 2,100 units imported during the fiscal year 2022-23.
This surge underscores the inclination of Pakistanis towards imported used cars over domestically assembled ones, largely due to the additional features typically available in imported vehicles.
Breaking down the imports, there was a significant rise in the arrival of economy and small low-segment cars, with nearly 9,900 units imported, alongside commercial vehicles, SUVs, and vans, which witnessed the importation of nearly 6,600 units. Moreover, luxury vehicle imports also experienced a noteworthy increase, among other categories.
Abdul Rehman Aizaz, Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), attributes this remarkable surge in used car imports to the removal of regulatory duty on used cars up to 1800cc in the federal budget for FY2023-24.
He pointed out the irony that while the elimination of the 100% regulatory duty benefits importers and companies dealing in Completely Built Units (CBUs), it does not provide relief to the struggling local industry, which is already grappling with significant demand-supply challenges.
The surge in used car imports poses both challenges and opportunities for the automotive sector and policymakers, necessitating a meticulous review of policies to ensure sustainable growth and support for local industries.
