Islamabad, July 20, 2024 – Pakistan has witnessed a massive rise of 271% in the import of cars during the fiscal year 2023-24, according to data released by the Pakistan Bureau of Statistics (PBS). The country spent $269 million on the import of motor cars in Completely Built Unit (CBU) form during FY24, compared to $72 million in the preceding fiscal year.
Analysts attribute this substantial surge in car imports to several factors. Key among them is the relaxation in the import of luxury goods by the government during the fiscal year under review. Additionally, the ease in restrictions for payment by the State Bank of Pakistan (SBP) also played a significant role in boosting car imports. The removal of regulatory duty on car imports further encouraged higher import volumes.
The year-on-year (YoY) import of motor cars recorded an even more dramatic increase of 306% in June 2024, amounting to $34 million compared to $8.3 million in the same month last year. This sharp rise in June 2024 imports can be attributed to anticipation of increased duties and taxes on car imports in the budget for the fiscal year 2024-25.
The significant rise in car imports highlights a shift in consumer behavior and market dynamics, influenced by government policies and regulatory changes. The relaxation in import restrictions and removal of regulatory duties have made it more feasible for businesses and individuals to import cars, leading to a spike in import activity.
However, this surge in car imports also raises questions about the impact on the local automobile industry and the broader economic implications. While the increased imports may cater to the growing demand for luxury and foreign cars, it could pose challenges for local manufacturers and impact the trade balance.
The government’s decision to relax import restrictions and remove duties appears to have been aimed at stimulating economic activity and providing consumers with more options. However, the long-term effects of this policy shift on the domestic auto industry and the economy will need to be carefully monitored.
Pakistan’s car imports have surged dramatically in FY24, driven by government policy changes and easing of import restrictions. The substantial rise in June 2024 imports underscores the anticipation of higher duties and taxes in the upcoming fiscal budget. The impact of these developments on the local industry and economy will be crucial to watch in the coming months.