Pakistan is drafting Auto Industry Development and Export Policy 2026–31, prioritizing affordability through easier financing, lower down payments, and extended repayment terms.
Under proposed rules, locally manufactured vehicles could be financed up to Rs1 Crore, with repayment periods extended seven years and minimum down payments reduced.
Officials expect relaxed financing conditions to revive consumer demand, reversing years of declining affordability caused by rising interest rates, strict lending rules, and economic pressures.
Import Liberalization Measures
According to the media reports, the draft policy considers phased liberalization of used vehicle imports, gradually reducing duties from 40 percent to zero by fiscal year 2030.
Depreciation benefits on imported used vehicles would be capped at 30 percent, balancing affordability for consumers with protective measures for domestic automobile manufacturers.
Stricter inspection and certification requirements will apply to imported vehicles, ensuring compliance with safety standards while expanding consumer choice in the automobile market.
Industry and Export Goals
Policy reforms include fixed booking prices, penalties for delivery delays, capped advance booking payments, and warranty obligations for manufacturers and authorized importers.
Spare parts profit margins at 3S dealerships would be capped at 20 percent, aiming to improve transparency and protect car buyers nationwide.
Long‑term targets include annual production exceeding 500,000 vehicles, auto exports reaching $1 billion, and new energy vehicles accounting for 30 percent of total sales.
The framework also sets goals for producing 100,000 tractors annually and installing 3,000 electric vehicle charging stations across Pakistan by the end of policy term.
Incentives for electric vehicles include free registration, token tax exemptions, toll relief, and government procurement, alongside development of “Islamabad Electric Mobility City” initiative.
