Pakistan is preparing to roll out a new auto policy on July 1, 2026. The plan focuses on cutting vehicle prices and boosting local manufacturing. Officials believe stronger localization can make cars more affordable for buyers.
The Ministry of Industries and Production recently reviewed the draft policy in a key meeting. Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan, chaired the session. Senior officials attended, including Secretary Saif Anjum and Engineering Development Board CEO Hammad Mansoor. Auto parts manufacturers also shared their input.
Officials said the policy will expand local production of auto parts. The ministry is preparing a list of components that can be made in Pakistan. At the same time, the government plans to protect locally produced parts for up to five years. This step should help the industry grow and stay competitive.
In addition, the government is reviewing tax and duty changes. These changes aim to reduce car prices, especially for middle-income buyers. As a result, more people may be able to afford vehicles in the coming years.
Haroon Akhtar Khan stressed that localization remains the core goal of the policy. However, he also urged manufacturers to adopt electric vehicle technology. He noted that global trends are shifting toward cleaner transport. Therefore, Pakistan must keep pace to stay competitive. The government is also reviewing proposals to offer incentives for EV parts manufacturing.
Meanwhile, the Engineering Development Board has received clear instructions. It must engage all stakeholders and gather industry feedback. This approach will help shape a policy that reflects real market needs. Officials also revealed that small electric vehicles priced below Rs 1 million may launch this year.
On the other hand, auto parts manufacturers raised several concerns. They said industry performance is declining despite more vehicle assemblers entering the market. Moreover, they highlighted issues with import practices. Some new players import parts at higher duties but still use lower-duty CKD kits for other components.
Industry representatives also urged the government to support small and medium-sized manufacturers. They stressed the need to promote true local production instead of simple assembly. According to them, the upcoming policy must address these gaps to ensure long-term growth.
