Pakistan's Auto Industry Warns Eased Used-Car Import Rules Could Cost 1.8 Million Jobs

Pakistan's auto industry has issued a stark warning: a change in import policy, it says, could put 1.8 million livelihoods at risk.

The warning comes from the Pakistan Association of Automotive Parts Manufacturers (PAAPAM), which says the government's relaxed rules for importing used vehicles threaten 300,000 direct jobs and 1.5 million indirect jobs across the industry.

The trigger is a notification issued by the Engineering Development Board on September 30, which allows businesses to import used vehicles without the licensing requirement that applied earlier. According to the association, the change also removes safeguards around after-sales service and spare parts — the support network that keeps vehicles running long after they are sold.

Pakistan's automotive sector is one of the country's larger industrial employers. Local assemblers build cars, motorcycles, tractors and commercial vehicles; behind them sits a deep supply chain of parts manufacturers producing everything from batteries and tyres to wiring harnesses and body panels. The industry argues that this ecosystem exists because policy has shielded it from being undercut by unrestricted imports of used vehicles from abroad — traditionally, Japan has been the main source of Pakistan's imported used cars.

Consumers, it should be said, have often seen the issue differently. Used imports have historically offered Pakistani buyers better-equipped vehicles at lower prices than locally assembled models, and restrictions on them have been criticised as protecting manufacturers at the expense of buyers. The government's relaxation is presumably aimed at widening consumer choice and improving affordability.

The industry's counter-argument is about what happens next. If used imports flood the market, local assembly volumes fall, parts vendors lose orders and factories shed workers — the 300,000 direct jobs in the association's estimate. The 1.5 million indirect jobs cover the wider web: dealerships, workshops, transporters and small businesses that live off the industry's activity. The association also warns about the after-sales gap: imported used vehicles arriving without service and spare-parts commitments can leave buyers with cars that are difficult and expensive to maintain.

The debate will be familiar to anyone who follows trade policy in developing economies: the tension between open markets that benefit consumers today and industrial policies that protect jobs and build manufacturing capacity for tomorrow. Pakistan has swung between the two positions for decades, and the auto sector has always been at the centre of the argument.

What happens next depends on whether the government treats the September notification as final or as the opening of a negotiation. The industry has made its number public: 1.8 million jobs. That is a figure no policymaker can ignore for long.

Follow Rise Pakistan on Facebook for daily updates: https://www.facebook.com/profile.php?id=100077289971426