Government Allows the Import of Used Cars With Up to 2000 Km Mileage

In a recent development, the federal government, through the introduction of SRO 430 from the Ministry of Commerce, has given the green light for importing used vehicles with mileage up to 2000 km. This marks an exciting update to the Import Policy Order 2022. In simple terms, if a car has clocked less than 2K kilometers, it’s now considered brand new when brought into the country. Just to give you some context, previously, the mileage limit for this was set at 500 km. Let’s see the details here!

As per different media sources, the recent adjustment in the vehicle import policy has caught attention, leaving many wondering about the timing, just months before the 2024-25 budget. Previously, a “new” imported car was defined as one with a mileage of 500 kilometers after booking from a foreign manufacturer. However, the definition has now broadened to include cars with up to 2,000 kilometers traveled before import, still regarded as new by the government. Customs officials will verify that these latest model cars were manufactured in the year of their import  in Pakistan.

An official from the Ministry of Industries shared some valuable insights with a media outlet. They pointed out how certain vehicles manufactured in one part of China would travel a significant distance of 800-1,500 kilometers within the country just to reach the port city. From there, they’d be shipped out to Pakistan. This entire process brought attention to the issue within the cabinet, leading them to approve the import of cars with up to 2,000 kilometers on the meter.

So, according to the official, this topic really got the cabinet talking. And Eventually, they finally gave the thumbs up for the government to import cars that have traveled up to 2,000 kilometers. They are basically treating these cars as brand new, not used. Oh, and just to clear things up, they are still not allowing the commercial import of genuinely used cars. This decision came after the Pakistan Muslim League-Nawaz (PMLN)-led Pakistan Democratic Movement (PDM) coalition government cracked down on car imports to protect our forex reserves, which were dwindling.

The State Bank of Pakistan has also made importing easier by relaxing regulations on advance payments. Now, authorized dealers can make full payments upfront without needing prior approval.

It’s worth noting that new car sales are on the upswing. Overall car sales surged by a whopping 61% in Feb 2024 compared to Feb 2023 – PAMA. That’s quite a jump, with 9625 units sold in Feb 2024 compared to 5968 units in Feb 2023.

Now, here’s the thing: if the government decides to ease restrictions on importing used vehicles, it could put a dent in the growing sales of local cars. Plus, it might put extra pressure on our foreign exchange reserves. But for now, experts aren’t expecting any major shakeups in the auto industry, since the relaxation applies to new cars, not the used ones.

What’s your take on this policy change? Do you think it’s a sign that the government might eventually lift the ban on importing used cars? Share your thoughts in the comments below!