Import-centric auto policy under fire

Pakistan’s newly issued automotive policy is facing objections from parts manufacturers, who say its incentives favour imported vehicles and kits over domestic production. Former PAAPAM officials warned that nearly 1,200 engineering and component businesses could be put at risk, alongside 300,000 direct jobs and another 1.5 million indirect livelihoods.

They also cautioned that greater vehicle imports could add to foreign-exchange demand and reduce localisation, which they put at 50% to 65% in some locally assembled models. A former association chairman said the plan to lower duties on fully built vehicles to 15% by 2031 could weaken the domestic supply chain, including material producers such as International Steels, Aisha Steel and People’s Steel Mills. The Pakistan Automotive Manufacturers Association, by contrast, called the policy necessary and requested its official text.