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June 30, 2025 marked a watershed moment for Pakistan’s automotive sector: with the issuance of SRO 1895(I)/2025, the federal government officially legalized the commercial import of used cars under HS codes 8702, 8703, 8704, and 8711. This policy shift allows imports of vehicles less than five years old, with additional duties and compliance requirements.

In response, Indus Motor Company (IMC) — the assembler and distributor of Toyota vehicles in Pakistan — has applied to the Engineering Development Board (EDB), seeking guidance on procedural, regulatory, and implementation steps necessary to begin used car import operations.

This move signals a major shift in the used car import policy, and has deep implications for local assemblers, importers, dealers, and consumers. In this article, we explore what this development means for Pakistan’s used car market, how it affects auction sheet verification and car history checks, and where Car Advisers fits in this evolving landscape.

Policy Transformation: Used Car Imports Become Commercial

Prior to SRO 1895(I)/2025, the import of used vehicles into Pakistan was restricted to gift, transfer of residence, or baggage schemes. With the new policy:

Commercial import of Japanese and other used cars is permitted under specified HS / PCT codes.
Imported cars must be less than 5 years old until June 30, 2026 — after which the age limit may be deregulated.
A 40% regulatory duty is imposed on top of existing customs and taxes for used car imports under this scheme, with the duty to phase down by 10% annually until 2029–30.
Vehicles must comply with environmental, safety, and quality standards, subject to testing and certification criteria presided by the EDB and relevant ministries.
The policy does not yet clarify licensing, importer eligibility, or criteria for standards enforcement — creating uncertainty for market players.

In parallel, the government plans to phase out gift and baggage import schemes, particularly under pressure from the IMF, tightening loopholes for special import routes.

IMC’s Strategic Entry: What Toyota’s Partner Plans

IMC’s outreach to EDB makes its intentions clear: it aims to participate in commercial used car importation, while maintaining its foundational role in local CKD assembly.

Key aspects of IMC’s pitch:

It has a country-wide network of 58 dealerships, staffed with trained technicians, which the company argues can sustain after-sales service, warranty work, and quality support for imported vehicles.
The company is seeking formal procedural clarity from the EDB: documentation, compliance parameters, quality testing, and importer eligibility rules.
IMC insists that it will not abandon localization or employment goals — but sees used car imports as an extension of its business strategy.

If IMC becomes a major importer, the dynamics in Pakistan’s used car market may tilt. Dealers and independent importers will face a new competitor that can leverage scale, brand reputation, and integrated infrastructure.

Market Implications: Winners & Risks

Consumers & Buyers

Expanded options: Previously unavailable models may enter the Pakistani market via dealers, backed by service coverage and inspection reports.
Demand for verification: Tools like auction sheet verification, vehicle history check, and pre-purchase inspection will become critical trust anchors.
Uncertain pricing: The 40% regulatory duty plus customs will inflate costs. Whether imported used cars can undercut local assembly depends heavily on duty structure and exchange rates.

Local Assemblers & Dealers

Intensified competition: Firms like Pak Suzuki, Honda Atlas and other assemblers may feel pressure in upper segments.
Necessity to adapt: To stay competitive, local production must optimize efficiency, reduce margins, and enhance value.
Hybrid models: Assemblers may combine local assembly with import modules, offering both locally built and imported used vehicles side by side.

Importers & Dealers

Barrier to entry: Strict compliance, licensing, and standards could limit who can successfully import vehicles.
Scale advantage: Importers with logistics, verification, partner networks, and platforms like Car Advisers will have the edge.
Importance of trust & verification: A flood of imports without credible inspection and history data risks reputational collapses — making verification services essential.

Role of Car Advisers in the New Landscape

As Pakistan’s Largest Automobile Platform, Car Advisers offers a portfolio of services including:

Conclusion & Future Outlook

With the government’s policy shift, Pakistan stands at the cusp of a new era in used car imports. While the legal framework and duties are now in place, many execution details — licensing, standards, importer eligibility-remain to be clarified.

IMC’s move to explore commercial used car imports puts pressure on incumbents, elevates consumer expectations, and reinforces the importance of pre-import verification tools like auction sheet checks and inspections. Platforms like Car Advisers, with infrastructure and trust credentials, are poised to become essential intermediaries between global imports and Pakistani buyers.

FAQs

Q1: What does SRO 1895(I)/2025 do?

It legalizes the commercial import of used vehicles under HS codes 8702, 8703, 8704, and 8711.

Q2: How old can imported vehicles be under this policy?

Vehicles must be less than 5 years old until June 30, 2026. After that, the age limit may be removed.

Q3: What additional duty applies?

A 40% regulatory duty (on top of existing customs duties) applies initially, to phase down over time.

Q4: What does Car Advisers offer in this scenario?

We provide auction sheet verification, car inspection, and trusted listings via Buy / Sell, empowering buyers to transact safely.

Q5: When will imports begin in practice?

That depends on the final procedural guidelines from EDB and related ministries. IMC and others are actively seeking clarity now.

Thinking of importing a used car or buying one in Pakistan? Secure your peace of mind with Car Advisers’ Auction Sheet Verification and comprehensive vehicle inspection services.

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