Pakistan is working on revamping its car sector via the proposed Automotive and Auto Parts Manufacturing Policy 2026-31, shifting the industry from mere assembly to export-driven production.
Over a five-year span, the draft establishes a goal of $6.01 billion for shipments of vehicles and components abroad. It additionally suggests cutting duties on imported cars and assembly kits down to 15% by the fiscal year 2030-31.
On October 20, Prime Minister Shehbaz Sharif signed off on the draft, with the federal cabinet expected to grant approval in principle next. The framework lays out a long-term path for the car industry, focusing more heavily on global markets and local manufacturing strength.
Transitioning past simple assembly might open doors for domestic firms to build better production skills and supply parts internationally. Yet, the suggested duty cuts have sparked worry among domestic auto parts makers.
Industry spokespeople cautioned that reducing levies on foreign parts while ignoring high expenses for domestic makers might squeeze local production. Such expenses hinder the capacity of Pakistani producers to rival foreign alternatives.
These worries show the difficulty of weighing cheaper imports against domestic sector growth. Local suppliers argue they need a fairer competitive setup to keep manufacturing alive, even as reduced tariffs alter cost calculations for vehicle assemblers.
The strategy seeks to turn Pakistan's car sector outward and improve its standing globally. Success rests on the final framework, the rollout of duty cuts, and aid given to local manufacturers.
Review by the federal cabinet represents the upcoming phase for the proposal. Ultimate choices will dictate investments, domestic output, and overseas sales for the country's car industry moving forward.
