Auto experts criticise draft policy for weak localisation measures

Business Recorder reported that auto experts want the government to shape the upcoming auto policy for 2026-2031 around measures that favour local production, rather than mainly strengthening assembly and imports. Analyst Zain Shariq argued the draft lacks any real localisation provisions and suggested it be renamed an assembling and import policy. He also said the plan treats exports as a given while including no steps to cut structural costs of 34%.

Shariq said putting Hybrid Electric Vehicles under the 18% sales tax would penalise hybrids, which offer higher local content in some areas and lower emissions. He argued that incentives should track expected fuel savings rather than vehicle labels, warning that the benefits rest on assumptions that ignore ground realities. Separately, he said using federal excise duty on internal combustion engine vehicles to offset EV sales tax losses penalises manufacturers that have localised production.

Consultant Shafiq Ahmed Shaikh called the earlier version of the policy a major achievement, expecting higher volumes, new technologies, foreign investment and cheaper but better-featured Chinese cars. He said the policy could lower the petrol import bill, support vendors and exports to Central Asia and Africa, and expand consumer financing for banks. He also suggested a flat 15% duty be reconsidered, warning it could close local parts factories and cost jobs, and recommended banning imports of used, accident-damaged vehicles and mandating VIN cross-referencing.