Pakistan’s imports of new and used cars surged during the first two months of FY2026-27, reflecting growing activity in the country’s rapidly changing automobile market.
Imports of motor cars reached $81.4 million during July and August 2026, up approximately 36% from $59 million during the same two months of the previous fiscal year.
The increase comes as new automotive brands bring completely built-up vehicles into Pakistan ahead of planned local assembly, while used-car imports have also recovered sharply after dropping earlier in the year.
The trend highlights an important transition in Pakistan’s auto industry as conventional locally assembled vehicles increasingly compete with imported hybrids, electric vehicles and other new-energy models.
Pakistan’s Car Imports Rise to $81.4 Million
Pakistan Bureau of Statistics trade data shows a substantial year-on-year increase in the value of imported motor cars.
| Period | Car Imports |
|---|---|
| July-August 2025 | $59 million |
| July-August 2026 | $81.4 million |
| Increase | Approximately 36% |
The figures include both new and used vehicles.
But the increase does not necessarily mean Pakistani consumers are simply abandoning locally manufactured cars in favour of imports.
Part of the growth is linked to new automotive companies initially importing vehicles before establishing or expanding local assembly operations.
New Automakers Are Importing Vehicles Before Local Assembly
Pakistan’s automotive market has attracted a growing number of brands, particularly companies offering electric vehicles, plug-in hybrids and conventional hybrids.
Before a manufacturer begins assembling a model locally, it will often introduce the vehicle through CBU imports.
CBU stands for Completely Built Unit.
These vehicles arrive in Pakistan fully manufactured rather than being assembled domestically from imported and locally produced components.
Importing a limited number of CBUs allows a manufacturer to:
- Introduce a new model quickly
- Build brand awareness
- Establish dealerships
- Test consumer demand
- Train sales and service staff
- Develop after-sales infrastructure
- Prepare for eventual local production
Once sufficient demand exists, some manufacturers may transition toward local assembly.
New-Energy Vehicle Imports Reach Up to 2,000 Units a Month
One of the most important developments is the growing presence of new-energy vehicles.
Industry reporting indicates that leading Chinese companies have recently been importing approximately 1,500 to 2,000 new-energy vehicles per month.
The term new-energy vehicle can cover several technologies, including:
- Battery-electric vehicles
- Plug-in hybrid electric vehicles
- Range-extended electric vehicles
- Other electrified powertrains
Chinese manufacturers have become particularly important to Pakistan’s emerging EV and hybrid market.
Some of these companies are expected to move toward local assembly after establishing their brands and distribution networks.
Why Chinese Automakers Are Expanding in Pakistan
Pakistan’s car market has historically been dominated by a relatively small number of Japanese manufacturers.
That structure is gradually changing.
New brands have entered different market segments with:
- Electric vehicles
- Plug-in hybrids
- SUVs
- Crossovers
- Premium vehicles
- Compact EVs
Chinese automakers have become especially aggressive in electrification.
Pakistan also wants to reduce its dependence on imported petroleum, making EVs and other electrified vehicles strategically important from an energy perspective.
However, importing complete vehicles creates a different economic trade-off because CBUs themselves require foreign exchange.
Local assembly can potentially reduce that impact over time if manufacturers progressively increase locally sourced components.
Used Car Imports Have Also Rebounded
The other major contributor to the import trend is the used-car market.
Pakistan’s used-car imports have fluctuated dramatically during 2026 following changes to the country’s vehicle import rules.
Only 48 used vehicles reportedly arrived in May.
That figure jumped to 843 vehicles in June.
Imports then increased dramatically to approximately 1,938 used vehicles in July before moderating to 1,445 units in August.
| Month | Used Vehicles Imported |
|---|---|
| May 2026 | 48 |
| June 2026 | 843 |
| July 2026 | 1,938 |
| August 2026 | 1,445 |
The July-August period therefore saw more than 3,300 used vehicles enter Pakistan.
The rapid rebound demonstrates that demand for imported used vehicles remains substantial despite regulatory changes.
Gift Scheme Accounts for Most Used Car Imports
The composition of used-car imports is particularly noteworthy.
In July, approximately:
- 1,876 vehicles entered through the gift scheme
- 53 vehicles through the baggage scheme
- 9 vehicles through transfer of residence
In August:
- 1,406 vehicles arrived through the gift scheme
- 38 vehicles through the baggage scheme
- 1 vehicle through transfer of residence
The gift scheme therefore accounted for the overwhelming majority of used vehicles arriving during these two months.
Pakistan Changed Used-Car Import Rules in 2026
The unusual monthly movements follow significant changes to Pakistan’s used-car import regime.
The government abolished the baggage scheme earlier in 2026.
Pakistan also introduced mandatory pre-shipment inspection requirements for vehicles imported under the remaining applicable schemes.
These regulatory changes contributed to sharp fluctuations in import volumes while importers adjusted to the revised system.
Used-Car Imports Fell During FY2025-26
Despite the recent rebound, Pakistan imported fewer used vehicles over the previous full fiscal year.
Around 38,000 used vehicles were imported during FY2025-26.
That compares with approximately 42,000 vehicles in FY2024-25.
The recent July-August increase therefore needs to be viewed in the context of both regulatory changes and the lower annual import volume recorded previously.
Why Pakistani Consumers Buy Imported Used Cars
Imported Japanese used cars have historically attracted Pakistani buyers for several reasons.
Depending on the model, they can offer features such as:
- Hybrid powertrains
- Advanced driver-assistance technology
- Multiple airbags
- Compact dimensions
- Better fuel economy
- Higher equipment levels
- Kei-car options
- Features unavailable on equivalent locally assembled models
However, imported vehicles can also present disadvantages.
Spare-parts availability, resale value, specialised maintenance, warranty coverage and accident history can vary substantially between individual vehicles.
Buyers should therefore evaluate more than simply the purchase price.
Local Auto-Parts Manufacturers Are Concerned
Pakistan’s domestic auto-parts industry views rising CBU imports differently.
Local vendors argue that every fully imported vehicle represents a vehicle for which many components are not manufactured in Pakistan.
Some locally assembled vehicles reportedly contain more than 50% locally produced content by value.
Industry representatives estimate that locally sourced parts can average around Rs1.5 million per vehicle in certain models.
The concern is that sustained growth in completely built-up imports could reduce demand for components manufactured by Pakistani vendors.
Why Localisation Matters
Vehicle manufacturing supports an ecosystem much larger than an assembly plant.
Domestic production can create demand for companies manufacturing:
- Plastic components
- Seats
- Glass
- Wiring harnesses
- Batteries
- Tyres
- Rubber components
- Metal parts
- Interior trim
- Lighting systems
- Other automotive components
This means the debate over CBU imports is not simply about whether consumers should have access to imported vehicles.
Policymakers must balance consumer choice and competition against industrial development, employment and foreign-exchange requirements.
Local Assembly Could Change the Equation
CBU imports can serve as an initial stage of market entry.
The longer-term economic impact changes if a manufacturer subsequently begins assembling vehicles in Pakistan.
Local assembly can potentially:
- Create manufacturing jobs
- Increase demand for Pakistani components
- Develop technical expertise
- Reduce per-unit import requirements
- Encourage supplier investment
- Expand the domestic automotive ecosystem
However, simply assembling imported kits does not automatically create deep localisation.
The economic benefit becomes greater as a larger share of components is produced domestically.
Pakistan’s Local Car Market Is Also Growing
The import increase is happening alongside a strong recovery in locally reported automobile sales.
According to Pakistan Automobile Manufacturers Association data reported by the Associated Press of Pakistan, 30,933 cars were sold during July-August 2026, compared with 17,192 units during the same period a year earlier.
That represents an increase of nearly 80% year on year.
Production also increased from 22,446 to 30,574 vehicles, a rise of approximately 36%.
The numbers indicate that rising imports have not occurred in isolation.
Pakistan’s broader passenger-car market has also been recovering.
Suzuki Alto Remains a Major Volume Driver
The Suzuki Alto continued to account for a significant portion of locally reported passenger-car sales.
Around 12,556 Altos were sold during July-August 2026 compared with 6,520 during the corresponding period last year.
Toyota Corolla and Yaris combined sales increased to 7,362 units from 4,971.
Honda car sales increased to 5,082 units from 1,842.
Suzuki Swift sales rose to 3,490 units from 1,995.
These figures indicate substantial year-on-year recovery among several established locally assembled models.
EVs Are Starting to Appear in Local Production Data
Electrification is also beginning to appear in Pakistan’s local manufacturing statistics.
PAMA data shows 93 units of the Dewan Honri-VE electric vehicle were produced during July-August 2026, while 123 units were sold.
The numbers remain small compared with conventional vehicles.
Nevertheless, they demonstrate that Pakistan’s transition toward electrified vehicles is no longer limited entirely to imports.
As more brands move from CBU imports to local assembly, locally produced EV and hybrid volumes could become increasingly important.
Imports and Local Production Can Grow at the Same Time
At first glance, a 36% rise in car imports might appear negative for domestic manufacturing.
The actual picture is more complicated.
During July-August:
Car imports increased 36% by value.
At the same time:
Locally reported car production increased approximately 36%.
And:
Locally reported car sales increased nearly 80%.
This suggests Pakistan’s automobile market is currently experiencing broader expansion rather than a simple shift from locally assembled vehicles to imported cars.
The important longer-term question is whether the current wave of imported new vehicles eventually translates into meaningful local production.
Foreign Exchange Remains an Important Issue
Pakistan must also consider the foreign-exchange impact of automobile imports.
CBUs require foreign currency because virtually the entire vehicle is imported.
Local assembly still requires imported parts and components, but greater localisation can reduce the foreign-exchange requirement per vehicle.
Electric vehicles create another layer to the calculation.
Importing EVs requires foreign exchange upfront, but widespread electrification could potentially reduce petroleum demand over time.
Pakistan therefore has to consider both the immediate import cost and the longer-term energy implications.
More Competition Could Benefit Pakistani Buyers
For consumers, the arrival of more brands can increase competition.
Pakistan’s automotive market has historically faced criticism over limited model choice, long delivery times and comparatively slow introduction of new technologies.
More manufacturers could pressure established companies to compete on:
- Price
- Safety
- Technology
- Fuel efficiency
- Warranty
- Features
- After-sales service
- Delivery times
However, the sustainability of new brands will depend on whether they establish reliable dealerships, spare-parts networks and local manufacturing operations.
A large number of imported models alone does not guarantee a healthy automotive industry.
What Happens Next?
Several trends will determine whether the current import surge becomes a temporary phenomenon or a structural shift.
The most important will be:
Local assembly plans: New entrants will need to demonstrate whether their announced production plans materialise.
EV policy: Government incentives and taxation will affect the economics of imported and locally assembled electrified vehicles.
Used-car regulations: Further changes to import schemes could significantly alter volumes.
Exchange rate: A weaker rupee would make imported vehicles more expensive.
Interest rates and auto financing: Cheaper financing can support demand for both established and newer brands.
Localisation: The percentage of Pakistani-made components will determine how much value remains within the domestic economy.
Pakistan’s Auto Market Is Becoming More Diverse
The 36% increase to $81.4 million in car imports during July-August 2026 reflects a changing Pakistani automobile market.
Used-car imports have recovered sharply, particularly through the gift scheme.
At the same time, Chinese and other new entrants are importing electrified vehicles as they establish their brands and prepare for local assembly.
But imports are only part of the story.
Local vehicle production and sales have also increased strongly during the first two months of FY2026-27.
Pakistan’s auto market is therefore becoming larger and more diverse — with conventional locally assembled cars, imported used vehicles, hybrids, plug-in hybrids and fully electric vehicles increasingly competing for the same customers.
The key question for the industry is what happens after the launch phase.
If new entrants move from importing CBUs toward meaningful local manufacturing and component sourcing, today’s import growth could eventually contribute to a broader domestic automotive industry.
If they remain heavily dependent on fully imported vehicles, concerns over foreign exchange, localisation and the future of Pakistan’s auto-parts sector are likely to intensify.