Pakistan Plans Major Auto Policy Shift to Boost Local Industry

Pakistan is gearing up to introduce a new auto policy set to take effect on July 1, 2026, with a strong focus on reducing vehicle prices and strengthening local manufacturing. Officials believe that increased localization of auto parts production will play a key role in making cars more affordable for the general public. The draft policy was recently reviewed in a high-level meeting at the Ministry of Industries and Production, chaired by Special Assistant to the Prime Minister Haroon Akhtar Khan, with senior officials including Secretary Saif Anjum and Engineering Development Board CEO Hammad Mansoor in attendance. Auto parts manufacturers also shared their input during the consultation process. The policy aims to expand domestic production of auto components by identifying parts that can be manufactured locally, while also proposing protection for locally made components for up to five years to support industry growth. In parallel, the government is considering tax and duty reforms to reduce car prices, especially for middle-income consumers. Haroon Akhtar Khan emphasized localization as the core objective while also encouraging a shift toward electric vehicle technology, aligning Pakistan with global trends in clean mobility. The EDB has been directed to engage stakeholders and refine industry feedback. Reports also suggest small EVs under Rs 1 million may be introduced this year.