Pakistan’s imports of completely knocked down (CKD) kits have reached their highest level since March 2022, reflecting a strong rebound in the country’s automobile sector after a prolonged slowdown.

The surge in CKD imports points to rising activity by local car assemblers as vehicle demand continues to recover across the market. Analysts say improving economic conditions, easing inflation, lower financing costs, and better consumer confidence have all contributed to stronger car sales and increased production.

CKD kits consist of imported vehicle parts used by local manufacturers to assemble cars domestically. A rise in these imports is widely seen as a key indicator of higher industrial activity in the automobile sector.

Pakistan’s auto industry had struggled over the past two years due to import restrictions, rupee depreciation, expensive financing, and declining purchasing power. Many assemblers were forced to cut production or temporarily halt operations because of shortages of imported components and difficulties in opening letters of credit.

The situation has improved in recent months as economic pressures eased and restrictions on imports were gradually relaxed. Falling interest rates have also revived auto financing, helping consumers return to the market.

While the increase in CKD imports signals renewed momentum in the auto sector, it is also contributing to the country’s growing import bill. Economists warn that sustained growth in imports could create pressure on the external account if exports and foreign inflows do not increase alongside demand.

The latest trend nevertheless highlights a significant recovery in Pakistan’s automobile industry, with local assemblers ramping up production to meet improving market demand.