The trade relations between Pakistan and Japan have been cordial and productive for decades, with Japanese products, especially automobiles, finding a significant market in Pakistan. This bond was initially formalized in May 1953 with the first bilateral trade agreement, but it was in the 1980s that trade relations fully solidified, further strengthening Japan’s influence in Pakistan’s automobile sector.
Japanese Cars: The Most Popular Choice in Pakistan’s Market
Japan’s automotive industry has a substantial presence in Pakistan. Japanese brands such as Suzuki, Toyota, and Honda not only dominate the market in terms of new car sales but have also established local assembly plants through foreign investment. The popularity of Japanese cars stems largely from their affordability, reliability, and feature-rich models. These qualities make Japanese cars highly attractive to Pakistani consumers, especially given that Japanese used cars are often more affordable than new ones and provide similar or superior features.
Demand for Used Cars in Pakistan’s Market
With a population now exceeding 240 million as per Pakistan’s 2023 census, the demand for affordable vehicles remains high. However, only around 9% of Pakistani households can afford a new car, making used cars a preferred option for the majority.
Japanese used cars fit this demand well, as they offer quality at a lower cost, especially compared to locally produced vehicles. This affordability has allowed Japanese used cars to maintain a strong foothold in Pakistan’s market over the years.
How Japan Became the Largest Exporter of Used Cars to Pakistan
The export of Japanese used cars to Pakistan began gaining momentum in the late 1980s, driven by Japan’s right-hand-drive system, which aligns with Pakistan’s. This compatibility has made it easier and more convenient for Pakistani buyers to purchase and use Japanese vehicles directly.
By 2015, Japan had become a major exporter of used cars globally, with approximately 9,400 units entering the Pakistani market alone. Pakistan’s preference for Japanese used cars is fueled by the extensive range of models available, competitive pricing, and the widespread availability of parts, making maintenance affordable.
Changes in Government Policies and the Import of Used Vehicles
Initially, Pakistan’s government allowed the import of used vehicles with relatively lax policies, which contributed to the rise of Japanese used car imports. However, as local car companies voiced concerns about the influx of these affordable imports impacting domestic sales, the government responded with stricter import regulations. Customs duties were raised, and the age limit for imported used vehicles was capped at three years.
Despite these regulations, the demand for used Japanese cars has persisted, as they often offer superior features and quality compared to locally manufactured options, making them attractive to buyers.
For Pakistanis abroad, the government permits the import of used vehicles under specific conditions, such as through personal baggage, gifting, or transfer of residence, which has helped maintain a steady flow of Japanese used cars into the country.
Business Networks and Import Channels
In recent years, many Pakistani entrepreneurs in Japan have developed networks that support the demand for used cars in Pakistan. These businesses utilize agents across the globe to facilitate the smooth import of cars from Japan to Pakistan. A prime example is SAT Japan, a company that has facilitated the storage, inspection, and export of over a million Japanese vehicles globally in the past two decades. With a substantial inventory featuring brands like Toyota, Nissan, and Honda, SAT Japan helps meet the demand for used cars, even in remote locations.
The used Japanese car market in Pakistan continues to thrive, bolstered by strong consumer demand, favorable government policies for Pakistani citizens abroad, and the cars’ overall compatibility with Pakistan’s driving system. For millions of Pakistanis, Japanese used cars offer an affordable and reliable option, especially given the high costs of new locally produced cars.
With the continued support of local import networks and businesses, the market for Japanese used cars in Pakistan shows promising growth, meeting the needs of a population eager for affordable and reliable transportation options.
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