Auto parts makers welcome sharp fall in used car imports

ISLAMABAD: Auto parts manufacturers have welcomed a steep decline in used vehicle imports, describing it as an important development for industrialisation and local manufacturing in Pakistan.

In a statement, the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) praised the government’s policy steps, saying they had significantly cut the inflow of used vehicles while backing domestic production and contributing positively to large-scale manufacturing (LSM) growth.

Citing import figures for April this year, the association said only 148 used vehicles entered the country under different schemes. Of these, 19 were imported under the gift scheme, 120 under the baggage scheme, and nine under the transfer of residence scheme.

Paapam said this was a major drop compared with last year, when between 3,500 and 4,000 used vehicles were being imported every month.

Government measures and local industry

The association said the reduction had been made possible by timely government action to close loopholes in schemes that, according to Paapam, had earlier been misused for commercial imports under facilities intended for overseas Pakistanis.

It said the decline in used car imports had helped redirect buyers towards vehicles assembled in Pakistan, which in turn had raised output among local assemblers and parts manufacturers.

Paapam also highlighted the financial impact on the domestic vendor industry from used vehicle imports. It said that, on average, locally made parts worth Rs1.5 million are used in every vehicle produced in Pakistan. According to the association, the import of used vehicles causes an annual revenue loss of more than Rs60 billion for local parts manufacturers.

Link to industrial recovery

The association said the latest trend was feeding into a broader recovery in industry and strengthening one of the country’s key economic indicators.

Paapam said the fall in used vehicle imports reflected the positive effect of policy support for local industry and would help sustain momentum in domestic manufacturing.

The statement linked the lower import numbers with stronger support for industrial activity, saying the shift was beneficial for both assemblers and the auto parts sector.