KARACHI: The overall import bills of vehicles and their spare parts have increased simultaneously.
However, stakeholders are divided on the reason for the increase – some of them blame the increase in used car imports for the growth while others attribute it to the increased arrival of new vehicles, including EVs, hybrids and plug-in hybrid vehicles.
According to Pakistan Bureau of Statistics (PBS) data, import of completely manufactured (CBU) cars reached $124 million in IHFY25 as against $108 million in the corresponding period last fiscal.
The country’s roads are full of used cars as expensive new and old hybrid vehicles, along with electric vehicles, are being imported by assemblers to test consumer reactions before starting to assemble these vehicles at home.
Imports of CKD/SKD parts for car assembly rose to $402 million in IHFY25 from $379 million in the same period last fiscal, data from PBS showed. It also indicates brisk vehicle sales for the next. Three or six months of 2025.
Relatively low interest rates of 13 percent, promotional offers on auto financing from banks and assemblers, and falling inflation have revived demand for four-wheelers.
A big jump in remittances, which usually comes from the real estate sector, is also contributing to the growing car market.
But auto parts manufacturer and exporter Mashhood Ali Khan is not satisfied with the rising sales figures of locally produced cars, LCVs, pickups and vans. He sees the current numbers as very low in that post-Covid there are 10 assemblers in the business with at least four models, while before the pandemic there were only three assemblers with limited models and still importing. were About 250,000 units.
Expressing regret, Mashhood Khan said that the nations which gained independence after Pakistan are making 10 to 6 million vehicles annually.
“In real terms, the auto market has shrunk rather than showing any growth as assemblers struggle to cross the previous benchmark of 250,000 units.”
Despite the growing number of assemblers, the problem of low localization in the spare parts industry persists as under the current auto policy, new entrants have the option to start assembling vehicles even with parts that are not produced locally.
Mashhood Khan said that therefore the shopkeepers are content to fulfill the orders placed by the old assemblers.
Along with the import of used vehicles, the import of new vehicles, especially electric vehicles, is increasing.
Heavy vehicles
Production of buses, trucks and other heavy vehicles also looks promising in the coming months as imports of CKD/SKD kits by assemblers increased to $156 million from $83 million during IHFY24.
Imports of heavy vehicles also increased to $48 million from $34 million during IHFY24.
Sindh government is at the forefront in terms of import of heavy vehicles. It aims to add 8000 electric buses to the People’s Bus Service in a phased manner.
Published in Dawn, January 26, 2025.
