Automobile market is heading for a shake-up after the government announced strict new duties on imported used cars. A Senate committee confirmed that commercial importers will now pay a 40% tariff on vehicles brought in from abroad starting next month. The measure is designed to shield local automakers, many of whom are struggling to maintain production levels.
The new policy allows imports of used cars up to five years old, though officials say environmental rules will be applied firmly. By July next year, age and quality restrictions are expected to be eased, and the tariff will gradually reduce to zero over four years.
The announcement has done little to cheer buyers, however. Cars such as Suzuki Alto are already selling for around three million rupees, and taxes make up the bulk of the price.
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Analysts note that affordability remains a major challenge, with low per capita income and limited financing options keeping many Pakistanis out of the market.
Industry sources say domestic production has fallen to less than 50% capacity, while imported used cars now account for nearly a quarter of sales.
High operational costs, expensive raw materials, and currency instability are pushing companies to the brink, with some suggesting that trading vehicles may soon be more profitable than manufacturing them.