Record $2bn CKD imports expose low localisation

KARACHI: Pakistan recorded an all-time high import of semi- and completely knocked-down (SKD/CKD) kits by local auto assemblers of over $2 billion in FY26, signalling either low localisation in new and old models amid robust auto sales.

As the local industry awaits the new auto policy after the current policy expires on June 30, followed by changes in taxes and duties in the budget 2026-27 and other policy initiatives, auto sales may remain upbeat in the coming months, in view of a 92pc increase in the import of CKD/SKD kits to $2.118bn in FY26, from $1.101bn in FY25.

Sales of cars in FY26 stood at 155,631 units, while SUV, pickup, van, and jeep sales totalled 50,814 units.

The previous all-time high import of parts and accessories by the assemblers was $1.7bn, recorded in FY22, when car sales stood at 234,180 units, followed by SUV, jeep, and van sales at 45,087 units. Total import bill of SKD/CKD has crossed over $6bn dollars from FY22 to FY26.

Part makers demand tariff review; auto loans surge amid robust sales

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Old assemblers claim localisation levels between 50-70pc, but many vendors argue that local parts in new models they are introducing are less than 50pc. Some new players, especially Korean assemblers, claim localisation of 35-40pc, while Chinese players are not ready to share their localisation.

State Bank of Pakistan’s foreign exchange reserves remain under pressure below $18 billion as of July 10.

In the current situation, it is critical that we utilise foreign reserves wisely. An open import policy is not in the national interest and will further strain the economy, said Mashood Ali Khan, auto parts maker and exporter.

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© Dawn Business