Draft auto policy balances hopes and realities

Pakistan’s draft Automotive and Auto Parts Manufacturing Policy for 2026-31 sets a five-year vehicle and parts export goal of $6.01 billion, while outlining a shift towards more competitive production. The Express Tribune reported that the prime minister cleared the draft on October 20, 2026, and that it is expected to go to the federal cabinet for initial approval. Tariffs on imported vehicles and assembly kits would be brought down in stages, reaching 15% by 2030-31.

The plan also links incentives to export performance and includes measures for electric vehicles, such as a higher purchase-financing ceiling of Rs10 million and repayment periods of up to five years. It envisages a Pakistan Automotive Testing Institute and more than Rs232 billion in Automotive Development Levy receipts over five years. For assemblers and parts suppliers, the central issue is whether tariff changes and support for technology, local vendors and exports can build manufacturing capability without undermining domestic producers.