Government Initiates Plan to Curb Influx of Used Cars
Pakistan's automotive sector has applauded a significant policy change aimed at reviving local manufacturing, as the government takes steps to phase out the import of used cars under the baggage scheme. This scheme had previously facilitated the entry of tens of thousands of vehicles into the country annually. The decision, which effectively terminates a channel that brought in 42,125 units in FY2025 alone, is viewed as a pivotal moment in the drive to reduce excess capacity and boost domestic production.
Indus Motor Company (IMC) has expressed gratitude towards Haroon Akhtar, Special Assistant to the Prime Minister (SAPM) on Industries and Production, Saif Anjum, Federal Secretary of the Ministry of Industries and Production, and Hamad Ali Mansoor, CEO of the Engineering Development Board (EDB), for their efforts in ensuring the stability of the local auto industry.
IMC's Chief Executive, Ali Asghar Jamali, commended the collaborative work towards the growth of the local auto industry, particularly the discontinuation of the baggage scheme for importing used cars. He emphasized that this significant policy shift signifies a major stride in fortifying Pakistan's local automotive manufacturing sector. By discouraging the importation of used vehicles, the initiative is anticipated to boost demand for locally assembled cars, drive industrial expansion, create job opportunities, and effectively decrease idle production capacity within the country's automotive sector.
It is projected that there will be a 50% transition from the baggage scheme to the Completely Knocked Down (CKD) market, while others may opt for the remaining schemes. Consequently, the used car market is estimated to decrease by 21,050 units.
In FY2025, a total of 35,806 units of used cars were imported under the personal baggage category. Following the abolition of this category in January 2026, imports under this scheme are no longer anticipated.
Additionally, 4,634 units were imported under the gift scheme, and 1,685 units were imported under the transfer of residence category in FY2025, resulting in a total of 42,125 imported used cars in that year.
