Relaxation in used car imports puts 1.8 million auto industry jobs at risk

Auto parts manufacturers in Pakistan have warned that relaxing regulations on the import of used vehicles could harm the local industry and jeopardize the livelihoods of hundreds of thousands of people. Industry representatives state that this decision could also place pressure on the local production of vehicles and their components.

According to reports surfacing on October 12, 2026, the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has expressed concern that the government's decision could impact 300,000 direct jobs and 1.5 million indirect employment opportunities.

What changes were made to import regulations?

On September 30, the Engineering Development Board issued a notification abolishing the previous licensing requirement for businesses to import used vehicles.

Expressing reservations about this change, PAAPAM highlighted concerns that the import policy might overlook safeguards regarding after-sales services and the availability of spare parts.

Potential impact on local industry and employment

According to the auto parts manufacturers' association, an increase in used vehicle imports could reduce demand for locally manufactured vehicles and parts. Consequently, factories, suppliers, and workers associated with the automotive sector could face difficulties.

The association has urged the federal government to review the decision and take measures to protect the local industry while safeguarding employment opportunities. On the other hand, proponents of used car imports argue that easing import restrictions will boost market competition, provide consumers with a wider range of vehicle choices, and potentially improve market conditions.

The ongoing debate surrounding the government's decision highlights concerns regarding the protection of local industry and jobs, while simultaneously emphasizing the importance of greater consumer choice and enhanced competition.