Indus Motor Company has warned that misuse of the gift scheme for used vehicle imports and the absence of a clear, long term auto policy are hurting local manufacturing. The Indus Motor used car imports warning comes from Ali Asghar Jamali, chief executive of the company that assembles Toyota vehicles in Pakistan.
Jamali said the recovery in demand was encouraging, but the misuse of the scheme is undermining local production and diverting activity away from domestic makers. He said the effects reach employment, localisation and government revenue.
He described the lack of a clear auto policy as a major concern. Uncertainty in the market is holding back investment decisions, he said, and a predictable policy framework with effective enforcement of import rules is essential to safeguard the industrial base.
A strong quarter, a worried industry
The warning comes despite better results. The company reported higher sales and profit for the first quarter of fiscal 2027, covering July to September 2026, with net sales of Rs74.015 billion and profit after tax of Rs7.384 billion, or Rs93.95 per share. The board declared an interim cash dividend of Rs56 per share.
Our report on those results is here: Toyota Indus Q1 Profit Rises to Rs7.38 Billion. The company attributed the improvement to higher sales volumes, increased localisation, cost control and higher other income.
The wider industry also grew. The Pakistan Automotive Manufacturers Association reported that sales of locally assembled passenger cars and light commercial vehicles rose 19.4 per cent to 50,480 units in the July to September quarter.
Yet the sector still runs at an estimated 45 per cent of installed production capacity. That gap points to considerable room for expansion, and it sharpens the company’s complaint: demand is recovering, but policy gaps and used imports keep local plants well below their potential.
Indus Motor used car imports: what the company wants changed
The company called for stricter enforcement of import rules and a consistent auto policy. It also sought rationalisation of duties and taxes, better access to auto financing and incentives for vehicle exports.
Jamali said a sharp rise in used vehicle imports during the quarter ended September 30, 2026 added to competitive pressure on local makers. Used imports compete directly with locally assembled cars, while local firms carry the costs of plants, workers and parts suppliers.
The company expects demand for locally made vehicles to improve gradually over the rest of fiscal 2026-27. It flagged risks that could slow that path: higher world oil prices, geopolitical uncertainty, rising operating costs and possible exchange rate volatility.
It said it will keep engaging policymakers and industry stakeholders to promote a predictable and investment friendly environment for the auto sector.
Local assembly has also been in focus in other segments, including motorcycles, covered here: Italian Motorcycles Begin Local Assembly in Pakistan.
What happens next
The debate now moves to policy. The company wants enforcement against scheme misuse and a long term framework that lets makers plan investment. Without that, it warns, local production, jobs and revenue will keep losing ground to used imports even as demand recovers.
For buyers, the stakes are choice and price. A stronger local industry means more locally assembled models and parts support. A weaker one means greater reliance on used imports, with fewer protections for buyers and workers alike.
What is the gift scheme misuse Indus Motor complains about?
The company says the gift scheme for importing used vehicles is being misused, which undermines local production and diverts activity away from domestic manufacturers, with effects on jobs, localisation and revenue.
How did the wider auto industry perform?
Locally assembled passenger car and light commercial vehicle sales rose 19.4 per cent to 50,480 units in the July to September quarter, but the sector still runs at about 45 per cent of installed capacity.
What policy changes does Indus Motor seek?
Stricter enforcement of import rules, a consistent long term auto policy, rationalised duties and taxes, better access to auto financing and incentives for vehicle exports.
