Pakistan’s automotive industry has urged Prime Minister Shehbaz Sharif to intervene over delays in the new Auto Policy and proposed tariff changes, warning that the measures could undermine local manufacturing, discourage investment, and accelerate deindustrialization.
In separate letters sent to the prime minister, the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) called for immediate government action to protect the domestic auto industry.
The groups requested that the automotive sector be excluded from the proposed tariff reductions under the National Tariff Policy 2026-31 and urged the government to finalize a long-delayed Auto Policy.
PAMA warned that reducing tariffs on Completely Built Unit (CBU) vehicle imports to 15 percent would make imported vehicles significantly more competitive than locally manufactured models. The association said the industry has attracted more than $5 billion in investment over the past three automotive policies, supports nearly 2.5 million livelihoods, contributes more than Rs. 700 billion in annual tax revenue from the passenger car segment, and currently operates at less than 50 percent of its installed production capacity.
The association cautioned that the proposed tariff cuts could lead to the closure of vehicle assembly plants and around 1,324 auto parts manufacturers, jeopardize more than $5 billion in investment, and result in widespread job losses. It also called for maintaining a minimum 40 percent tariff differential between imported and locally manufactured vehicles to support investment and localization.
Separately, PAAPAM said the continued delay in finalizing the new Auto Policy has created uncertainty for investors and stalled investment decisions, capacity expansion, and technology upgrades across the vendor industry.
The association argued that previous auto policies largely favored vehicle assemblers while providing little support to parts manufacturers, which it said account for about 80 percent of employment generated by the automotive sector.
PAAPAM urged the prime minister to convene a meeting to discuss a vendor focused and localization driven Auto Policy and requested an opportunity to present its views on the National Tariff Policy with the government’s economic team. The association said future policy should prioritize deeper localization, technology transfer, import substitution, and long term industrial development.
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