Pakistan’s proposed new Auto Policy aims to transform the country’s automotive industry by setting significantly higher export targets for both vehicle manufacturers and auto parts producers. The policy is designed to connect local manufacturers with global supply chains and encourage the industry to become more export-oriented.
Under the proposal, car exports would need to reach 4% during 2026–27 and increase to 20% by 2030–31. For auto parts manufacturers, the export target would rise from 5% to 15%. The government also plans to introduce a Duty and Tax Remission for Exporters scheme and establish an Auto Parts Export Council to support international sales.
The draft policy also places strong emphasis on electric vehicles. EVs could receive exemptions from federal excise duty, capital value tax, and withholding tax, while customs duty on EV charging-station equipment is proposed at just 1%.
To make EV financing easier, the proposed financing limit would increase to Rs10 million, while the maximum repayment period could be extended from three to five years. Electric, plug-in hybrid, and range-extended electric vehicles would receive equal treatment under the proposal.
The government is also considering reducing customs duties on conventional vehicles by up to 80% over the next five years, potentially creating more competition and helping bring down vehicle prices.
Consumer protection is another major part of the proposal. Manufacturers would reportedly be responsible for price increases after a vehicle has been booked, while buyers would have to receive a clear delivery date at the time of booking.
The draft will be discussed with the IMF before final approval.
Do you think this new Auto Policy can make Pakistani cars more affordable while turning the industry into a stronger export sector?
