As Pakistan’s economy faces challenges, the market for used and imported cars remains strong, fueled by a need for affordable options.
The used and imported car sector in Pakistan is thriving due to high demand for budget-friendly alternatives, a struggling local automotive industry, and increased second-hand vehicle imports. Analysts report steady demand as inflation and economic instability push local car prices out of reach for many consumers. Used cars now account for over 60% of all vehicle transactions in the country.
New car sales have declined due to supply chain disruptions, rising production costs, and economic uncertainty. In contrast, the used car market is booming, offering affordable and accessible options. Many consumers are turning to pre-owned and imported vehicles to meet their transportation needs.
Auto analyst Mohammad Waseem notes that the used car market is seeing significant growth in 2024 due to the demand for cost-effective vehicles.
“The middle class, a major market segment, can no longer afford new cars because of soaring prices, so they are seeking pre-owned and imported alternatives,” Waseem said.
Despite economic pressures, the auto sector has shown resilience, with strong demand for Japanese imported cars, which are perceived as more reliable and affordable than local options. These vehicles are gaining popularity among Pakistan’s urban population.
In the first half of 2024, second-hand car imports surged by nearly 20%, reflecting a shift towards this market segment.
Sher Jan, a used car importer, observed that despite higher duties on imports, consumer interest remains high.
“While the local industry is slowing down, our business in imported cars has grown significantly. Japanese cars offer reliability and value, even with the higher duties,” Jan said.
Stricter government regulations on car imports, intended to manage foreign exchange reserves, have impacted the flow of vehicles into the country.
Lahore-based auto expert Khalid Mahmood warned that further tightening of import regulations could pose challenges for the used and imported car market.
“Local manufacturers are trying to offer budget-friendly models, but they still can’t match the quality and affordability of used imported cars,” Mahmood said.
The market’s future depends on government policies. Persistent import restrictions might contract the used car sector, while more favorable policies could drive growth, continuing to meet the needs of budget-conscious consumers.