Will imported cars make vehicles cheaper or cripple Pakistan’s auto industry?

KARACHI: Following the government’s recent decision to allow commercial import of vehicles, a new debate has heated up in Pakistan’s auto market. While consumers and importers have welcomed the decision, those linked to the local auto industry have termed it damaging for domestic production.

According to government sources, the Ministry of Industries and Production has decided — under the latest policy — to permit the import of fully built-up (CBU) vehicles from abroad under specific conditions. The decision, officials say, aims to address the shortage of cars in the country, rising prices and limited choices for buyers.

‘Affordable cars will now be within reach of common man’

All Pakistan Car Dealers and Importers Association (Sindh) President Chaudhry Aamir Ali Khan termed the move an important step toward reducing car prices in Pakistan.

He said that opening commercial import would bring prices down and make affordable cars accessible to ordinary citizens.

“People will now have the option to import the car of their choice from abroad,” he noted.

He said that the demand to end restrictions on car imports had been made for a long time to create competition in the market, and expressed hope that commercial imports would be permitted soon.

Khan said that allowing commercial imports would also pressure local assemblers to offer better-quality vehicles at lower prices. “Once competition begins, the direct benefit will go to consumers,” he said.

He further claimed the policy would curb the smuggling and illegal entry of vehicles into the market.

According to him, if the government implemented this policy seriously, it could trigger a “revolution” in the auto sector.

‘Local industry will shut down’

On the other hand, members of the local auto parts industry strongly oppose the decision.

Auto parts manufacturer Syed Asad Ali told Urdu News that if the government freely allowed the import of ready-made vehicles, the domestic industry would suffer irreparable damage.

He said commercial imports would destroy the local auto sector. “There are dozens of factories here producing local parts and providing thousands of jobs. If fully built cars come from abroad, these factories will no longer be needed,” he said.

According to Ali, the shutdown of local factories would not only increase unemployment but could also affect the law and order situation. “Thousands of workers and technicians depend on these factories. Once the industry collapses, people will take to the streets, putting pressure on the economy and social stability,” he warned.

He also highlighted the economic aspect, saying that importing vehicles would drain the country’s foreign exchange. “Pakistan is already facing a dollar crisis. Importing finished vehicles will send more dollars abroad. It is better if the government reduces taxes locally so that cars manufactured in Pakistan become affordable,” he said.

‘Local industry may shrink’

Economic experts say that while the government’s move may offer immediate relief to consumers, it could harm the domestic industry in the long run.

Auto sector analysts believe that if unrestricted commercial imports continue, demand for locally produced vehicles will drop, causing the local industry to shrink. However, they also acknowledge that local companies have long restricted consumers to limited models at high prices, reducing competition in the market.

According to auto sector expert Mashhood Ali Khan, the government needs a balanced policy that provides affordable cars to consumers while protecting the local industry.

He said the government could limit commercial imports to a fixed number or specific category of vehicles, and simultaneously support local manufacturers through tax incentives and research funding, enabling them to compete at global standards.