KARACHI: Indus Motor Company Limited (IMC), the assembler of Toyota vehicles in Pakistan, has cautioned that Pakistan’s commercial used car import policy could severely impact the local auto industry. The warning came via its Directors’ Report issued today in Pakistan Stock Exchange.
Import Spike Sparks Industry Concerns
Toyota flagged a 54% surge in used car imports, reaching 13,537 units this quarter, up from 8,771 in the same period last year. The jump follows a government policy update in September 2025 that now allows the commercial import of used vehicles up to 5 years old, subject to a 40% additional regulatory duty, which will gradually decline by 10 percentage points each year until FY 2028-29.
Toyota stated:
“This policy will hurt the local auto industry in the long term and needs to be revisited.”
Toyota’s Sales and Production Up, But Risks Remain
In Q1 FY26 (first quarter of year 2025-26), Toyota’s vehicle production rose 54% to 10,230 units, while sales of CKD (locally assembled) and CBU (imported) units increased 59% to 9,976. The growth was largely driven by strong demand for the Corolla, Hilux, and new Yaris variants.
While overall auto sales rose 53.2% year-on-year to 42,267 units in Q1 FY26, the company noted that production is still running at just 50% capacity.
Despite this, Toyota stated that it holds a 15% market share and emphasized that inflation relief, currency stability, and consistent demand will be key to sustaining momentum.
Cautious Outlook as Economic Risks Persist
While IMC remains “cautiously optimistic,” however, it also mentioned that the overall business environment remains challenging, with continued risks from currency volatility, limited auto financing, regulatory changes, and growing competition from imported used vehicles.
The company noted that managing cost pressures, particularly those linked to foreign exchange and raw materials, will be critical in the coming months, alongside maintaining supply chain stability.
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