Import of used cars: Continued policy of encouraging may destabilise automotive sector

Pakistan’s auto manufacturing industry — a sector that contributes 2 percent to the national GDP, sustains 2.5 million direct jobs, and supports nearly 5 million livelihoods across its vast vendor and dealership network — is warning that the continued policy of encouraging import of used cars may destabilise one of the country’s most important industrial pillars. In FY25 alone, the automotive sector paid Rs 700 billion in taxes, amounting to about 6 percent of the total national revenue, and has attracted an estimated USD 5 billion in foreign direct investment (FDI) over the past two decades. Through localization efforts, the industry also saves about USD 150 million annually in import substitution. Despite these contributions, the sector finds itself at the centre of the government’s latest tax and tariff overhaul, shaped by Pakistan’s commitment to the International Monetary Fund (IMF).