THE state needs to make up its mind on the import of used vehicles. According to recent news reports, the FBR may be considering allowing the import of used cars up to five years old ‘in order to promote competition in the auto industry’. Current restrictions do not allow the import of used cars that are more than three years old, or more than five years old in the case of SUVs, and the proposal will standardise the policy to up to five years old for all used vehicles. But why is this needed, and why now? The government has just announced new policies to promote electric vehicles and automobile exports, and this proposal seems to fly in the face of both.

The local automobile industry is often criticised, and rightly so, for failing to provide good quality automobiles at price points that are accessible to the masses. The problem is, again, state-level policy. There have been so many loopholes in the regulations governing the automobile industry that true indigenisation accompanied by a transfer of technology has never really taken place. Automakers have repeatedly found ways to meet the bare minimum requirements for local value addition. As a result, the industry has become uncompetitive internationally. In recent years, the state has been encouraging more manufacturers to set up shop in Pakistan to ‘encourage competition’. Some positive outcomes of this policy include the introduction of several very decent Chinese automobile brands. Unfortunately, most of their cars remain out of reach for ordinary buyers. But allowing used car imports will not fix the real problem. Most imported used cars are write-offs that have been refurbished for resale. They come with no after-sales support or warranty, which often leaves buyers high and dry in case they run into a problem or need a faulty component replaced. The only people who really profit are the importers and the dealers. If the state is truly concerned about making quality automobiles accessible to the masses, it needs to rethink how it regulates the automobile industry. It cannot continue to run with the hare and hunt with the hounds. It either needs to pull away all protections by completely deregulating imports, thereby allowing true competition, or it should tighten its regulations to protect consumers’ interests, and not those of the industry.

Published in Dawn, May 19th, 2025