Pakistan Vehicle Imports Up 36%: Start with Small-Batch CBU, Then Discuss CKD

There is now a key judgment for Pakistan's auto market: it is more cash-efficient to start by selling vehicles in small CBU batches than to discuss CKD right away. From July to August, imports of new and used vehicles totaled US$81.4 million, up about 36% year-on-year, while CKD knocked-down parts imports over the same period were about US$355 million—the parts volume is more than four times that of complete vehicles, indicating that the threshold for local assembly hinges on investment and local partners, not on relationships. For importers familiar with only one or two models, this is the entry path with the smallest cash outlay.

The data comes from the Pakistan Bureau of Statistics. From July to August 2026, combined imports of new and used vehicles totaled US$81.4 million, compared with about US$59 million in the same period last year, an increase of about 36% by value; for used vehicles, 1,938 units arrived in July and 1,445 in August, totaling more than 3,300 units over the two months, with the vast majority going through the gift channel. The policy background is that in January this year, authorities canceled the personal baggage import channel and required pre-shipment inspection for vehicles under the gift and relocation transfer channels; vehicles in these two channels cannot be transferred within one year. The gate has tightened, but volume has not dropped to zero: used vehicle imports in the previous fiscal year were about 38,000 units, only one-tenth lower than 42,000 units the year before. Inspection only affects the gift and relocation transfer channels; normal commercial imports are not affected.

The cash accounts for the two entry methods differ greatly. CBU complete vehicles are subject to customs duty, additional duty, and sales tax based on CIF value, resulting in a heavy per-unit tax burden, but a shipment of a few dozen units can get started, with no factory, no minimum investment threshold, and no localization commitment; cash is tied up for one shipping cycle and recovered once sold. Pakistan also retains tariff and sales tax exemptions for imported electric vehicles, and Chinese automakers bring in 1,500–2,000 new energy vehicles per month, precisely evidence of using CBU as a low-cost trial. CKD knocked-down parts have a lower tax rate than complete vehicles, reducing the per-unit tax burden, but the premise is cooperation with a local assembly plant, meeting localization requirements, and first investing in molds and production lines; over the same period, CKD imports were about US$355 million, only about 16% more than US$305 million in the same period last year, a much slower pace than complete vehicles. The tax difference between the two paths ultimately comes down to a comparison of per-unit landed cost and cash recovery cycle.

For small and medium-sized importers, the risk is not tax, but pace. The localization rate by value for locally assembled vehicles in Pakistan has already exceeded 50%, with local value added per vehicle at about 1.5 million rupees, and local parts manufacturers have long objected to the CBU approach; this means the policy space for complete vehicle imports is smaller than for knocked-down parts, and once quotas or inspection standards tighten, vehicles stuck at transshipment ports will incur demurrage. Conversely, first using CBU to build up after-sales and spare parts networks, and waiting until monthly sales of a single model stabilize before discussing CKD, amounts to splitting policy risk into two stages. From July to August, locally assembled passenger vehicle sales were 30,933 units, compared with 17,192 units in the same period last year, up about 80%; local assembly plants are expanding production, the CKD window is opening, and the threshold is also rising. Doing these two things separately first is more stable than placing a heavy bet right away.

You can proceed in this order: first, calculate the three costs under the CBU approach—CIF value, customs duty and additional duty, and sales tax—and list the landed cost side by side with the local selling price of comparable vehicles; second, request the pre-shipment inspection report, certificate of origin, and vehicle conformity documents from the supplier to confirm whether it is going through the gift channel or normal commercial import; third, use a small batch order to verify whether registration, spare parts, and warranty can be implemented, then discuss CKD and local partners by model. Be sure to first confirm whether the model is on Pakistan's admission list to avoid being unable to register it after arrival. If you need to calculate the CBU landed cost and CKD payback period for a specific model based on current tax rates, provide the configuration list and estimated annual sales volume to obtain an estimate. After completing these three steps, then decide whether to scale up with CBU or switch to CKD local assembly.