Pakistan Auto Industry Sees Boost in Vehicle Imports

Wajahat

28 Jan 2025

266

Pakistan Auto Industry Sees Boost in Vehicle Imports

Pakistan's automobile industry has witnessed a notable surge in vehicle imports, raising questions among industry players about the driving forces behind this increase. Some attribute this growth to the influx of pre-owned cars, while others highlight the increasing demand for new vehicles, especially electric vehicles (EVs), hybrids, and plug-in hybrids.

Growth in CBU & CKD Imports

According to the latest statistics from Pakistan Bureau of Statistics (PBS), imports of completely built-up (CBU) cars have risen to $124 million in the first half of FY25, an increase from $108 million in the same period of the previous year. The growth can be attributed to the introduction of high-end hybrid and Electrical Cars models by local assemblers, who are keen to test the market demand for these vehicles.

Similarly, the import of CKD and SKD kits used for assembling cars locally has also seen an increase, growing from $379 million to $402 million during the same period. This uptick in CKD/SKD imports indicates a strong demand in the local auto sector and suggests that the trend will likely continue into 2025.

Key Drivers Behind the Surge

A combination of factors has been responsible for this rising demand. One key factor is the relatively low interest rate of 13%, which has made it easier for consumers to access auto financing. In addition, favorable financing options and a reduction in inflation have further incentivized consumers to purchase vehicles. Furthermore, a significant rise in remittances has had an indirect positive impact on car sales, as funds that would otherwise be invested in real estate are being redirected to the automobile sector.

Challenges with Low Localization

However, despite the overall positive growth, there is ongoing criticism regarding the low levels of localization in Pakistan's auto industry. The import of CKD/SKD kits for buses and trucks has also seen a significant rise. The value of these imports increased from $83 million to $156 million. This growth is partly attributed to initiatives such as the Peoples Bus Service project in Sindh, which plans to add 8,000 electric buses to its fleet, thus driving up demand for imported vehicles.

Looking Ahead: The Future of Pakistan's Auto Market

The sharp rise in vehicle imports reflects a transformation in Pakistan’s automotive market, influenced by changing consumer tastes and government policies. The coming months will be crucial in determining whether this import surge results in long-term stability and innovation for the country’s automotive industry.

Pakistan’s automobile industry is experiencing a period of significant growth, driven by increased demand for both imported and locally assembled vehicles. The growing preference for electric vehicles, coupled with government incentives and favorable financial conditions, is expected to play a key role in shaping the future of the auto market in Pakistan. The coming months will reveal whether this growth translates into lasting stability and technological advancements in the industry.

vehicle imports auto sector growth Pakistan automotive industry electric vehicles hybrid vehicles vehicle assembly CBU imports CKD kits auto financing in Pakistan vehicle market trends

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