Auto Policy 2026-31: PAAPAM seeks safeguards against used-car imports

The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has asked Prime Minister Shehbaz Sharif to keep curbs on abuse of used-car import schemes in the Auto Policy 2026-31 being finalised. Chairman Usman Aslam Malik said in a Tuesday statement that dropping the planned one-year mandatory non-transfer condition for vehicles brought in under overseas schemes would seriously harm the domestic auto sector. It would also reverse progress on documenting the national economy.

Unregulated imports threaten 1.8 million jobs linked to local auto parts manufacturing, and each imported used car replaces about Rs1.5 million worth of local components. About 50,000 used cars were imported last year, close to 30 percent of the domestic market, with an estimated Rs200 billion in black-money activity. Under the National Tariff Policy 2025-30, the premium on used cars over new ones is set to shrink from 40 percent in FY26 to zero by FY30.

Customs duty on new CBU vehicles of 850cc or below was lowered to 30 percent in the 2026-27 budget, and depreciation can reach 36 percent, making used imports more lucrative for traders. He warned that local component makers, who can supply as much as 65 percent of the value of parts sold to assemblers, would suffer if the rule were dropped. PAAPAM wants the one-year non-transfer rule kept so overseas schemes help genuine beneficiaries, not dealer networks.