New Import Rules Could Put Pakistan’s Auto Industry at Risk of Rs. 50 Billion

New Rules Trigger Industry Concerns

Pakistan’s automotive sector is facing fresh uncertainty after the Engineering Development Board (EDB) introduced revised rules governing the commercial import of used vehicles. The notification issued on September 30, 2026, relaxed several safeguards that had been included in the previous framework. The Pakistan Automotive Manufacturers Association (PAMA) has now urged the government to review and suspend the changes pending consultation with industry stakeholders.

PAMA Warns of More Than Rs50 Billion in Losses

PAMA estimates that continued growth in commercial used-car imports could cause losses exceeding Rs50 billion to domestic vehicle manufacturers and their extensive vendor network. The association says this estimate reflects the potential impact if imports return to FY2025–26 levels. The figure is an industry estimate rather than a confirmed government loss.

Used-Car Imports Rise Sharply

Ministry of Commerce figures cited by PAMA show a major increase in commercial used-vehicle imports during 2026. Imports rose from only 48 vehicles in May to 843 in June, 1,938 in July, 1,445 in August and 2,276 in September. PAMA believes the removal of regulatory safeguards could accelerate this trend further.

What Has Changed Under the New Framework?

The revised rules limit the regulatory framework to used vehicles, whereas the earlier notification covered both new and used completely built-up vehicles. The changes also remove the minimum capital requirement for importing companies and the requirement for adequate after-sales service. Inspection responsibilities have also shifted from the EDB to the Pakistan Standards and Quality Control Authority (PSQCA).

Importers See Opportunities

The policy change has received a different response from vehicle importers and dealers. According to Dawn, representatives of the importing sector believe that easier commercial imports could encourage investment and expand business activity. They also argue that streamlined procedures could make it easier for more businesses to participate in the used-vehicle market.

Local Manufacturers Highlight Competitive Pressure

Local automakers and parts manufacturers, however, argue that imported used vehicles have significant cost advantages. PAMA has pointed to depreciation benefits of up to 36%, while domestic manufacturers carry costs related to factories, localization, technology, employment, taxation and regulatory compliance. The association says this creates an uneven competitive environment for locally produced vehicles.

Impact Could Extend Beyond Car Companies

The issue is not limited to vehicle assemblers. Pakistan’s automotive ecosystem includes a large network of parts manufacturers and other suppliers. Dawn reported that the local auto-parts sector has also raised concerns, noting that locally produced vehicles contain significant domestic content and support employment and economic activity. A sustained shift toward imported vehicles could therefore affect the wider manufacturing and vendor base.

Government Faces a Balancing Act

The debate now puts the government in a difficult position: promoting competition and giving consumers more vehicle choices while also protecting domestic investment, localization and manufacturing capacity. PAMA has requested that the September 30 notification be reviewed and that meaningful consultations take place with industry stakeholders. As Pakistan prepares its upcoming auto and tariff policies, how the government balances imports with local manufacturing could have a major impact on the country’s automotive sector.