Pakistan’s auto sector has welcomed a major policy shift aimed at revitalising local manufacturing, as the government moves to phase out used car imports under the baggage scheme, previously responsible for tens of thousands of vehicle inflows annually. The decision, which effectively halts a channel that brought in 42,125 units in FY2025 alone, is being seen as a turning point in efforts to reduce idle capacity and stimulate domestic production.

Indus Motor Company (IMC) appreciated the efforts of Haroon Akhtar, Special Assistant to the Prime Minister (SAPM) on Industries and Production, Saif Anjum, Federal Secretary of the Ministry of Industries and Production, and Hamad Ali Mansoor, CEO of the Engineering Development Board (EDB), for the stability of the local auto industry.

“I really appreciate their concerted efforts for the growth of the local auto industry, especially abolishing the baggage scheme for used car imports,” said Chief Executive IMC Ali Asghar Jamali.

He added that this landmark policy decision marks a significant step towards strengthening Pakistan’s local automotive manufacturing sector. By discouraging the influx of used vehicles, the initiative is expected to enhance demand for locally assembled cars, support industrial growth, generate employment and effectively reduce idle production capacity within the country’s automotive industry.

It is worth adding that a 50% shift is expected from the baggage scheme to the CKD market, while others may shift to the remaining schemes. Thus, the used car market will shift by 21,050 units.

In FY2025, a total of 35,806 units of used cars were imported under the personal baggage category. Since this category was abolished in January 2026, imports under this category are not expected to happen now.

Similarly, under the gift scheme, a total of 4,634 units were imported, and under the transfer of residence category, a total of 1,685 units were imported in FY2025, leading to total imported used car units of 42,125 in that year.