'Auto policy puts 1.5m jobs at risk'

PAAPAM has asked Prime Minister Shehbaz Sharif to reconsider the proposed Auto Policy 2026-31 before it is approved, arguing that lower import barriers could weaken domestic parts production and put jobs at risk. In a letter dated October 23, its chairman Abdul Rehman Aizaz said the sector includes more than 1,200 companies and supports 1.5 million jobs, while replacing $1.8 billion of imports annually and supplying assemblers with Rs700 billion in locally made components. The association has also sought a meeting to share alternative proposals.

The draft combines gradual tariff cuts with export requirements and incentives for cleaner vehicle technologies. It sets a cumulative export ambition of $6 billion for vehicles and parts by 2030-31, and proposes sales tax rates of 1% for battery-electric models, 6% for range-extended electric vehicles and 9% for plug-in hybrids. The dispute reflects differing priorities among local suppliers, assemblers and importers, while policymakers face pressure to encourage exports and new technology without eroding domestic manufacturing capacity.