Pakistan’s new Auto Policy proposes a sharp increase in export targets, requiring car exports to reach 4 percent in 2026 to 27 and 20 percent by 2030 to 31. The target for auto parts manufacturers would also rise from 5 percent to 15 percent.
The policy seeks to increase exports by linking local auto parts manufacturers with global supply chains. It also proposes a Duty and Tax Remission for Exporters scheme and the creation of an Auto Parts Export Council.
The policy also proposes measures to lower vehicle prices and promote electric vehicles through tax incentives and other financial relief. The draft will be discussed with the International Monetary Fund through online consultations and during the upcoming economic review before final approval.
Electric vehicles are proposed to receive exemption from federal excise duty, capital value tax and withholding tax, while customs duty on electric vehicle charging station equipment would be set at 1 percent.
The proposed policy also recommends raising the financing limit for electric vehicles to Rs. 10 million and extending the loan repayment period from three to five years. Electric vehicles, plug in hybrid electric vehicles and range extended electric vehicles would receive equal treatment under the proposal.
The government also plans to reduce customs duties on conventional vehicles by up to 80 percent over the next five years, with the policy aimed at making vehicles more affordable while promoting fuel efficient and environmentally friendly options.
The policy proposes new consumer protection rules under which manufacturers would be responsible for any price increase after a vehicle is booked. Customers would also have to be given a delivery date at the time of booking.
The document sets six principles for vehicle manufacturers and proposes penalties for companies that fail to meet performance targets, along with incentives for those that achieve their targets.
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