ISLAMABAD: The Pakistan Auto Policy aims to transform the country’s automotive industry into an export-oriented sector, targeting $6 billion in vehicle exports over the next five years. The proposed policy also focuses on promoting electric vehicles (EVs), increasing auto-parts exports and improving consumer financing facilities to support the growth and competitiveness of Pakistan’s automobile industry.
Following approval from Prime Minister Shehbaz Sharif, the policy is expected to be presented to the federal cabinet for formal endorsement. Its proposed measures include mandatory export quotas for vehicle manufacturers, financial incentives for exporters and penalties for companies that fail to meet their assigned targets.
Pakistan Auto Policy Sets $6 Billion Export Target and Promotes Electric Vehicles
Under the proposed framework, auto-parts exports are targeted to reach $1.2 billion by fiscal year 2030-31. The policy proposes a 5% rebate on export value and an additional 10% incentive for exports exceeding previous levels. Manufacturers missing export targets for two consecutive years could face cancellation of their manufacturing certificates and withdrawal of financial incentives.
To encourage electric vehicle adoption, the policy proposes lower tariffs on small EVs priced below $15,000. It also recommends increasing the EV financing limit from Rs3 million to Rs10 million and extending the repayment period from three to five years.
Levy Proposed to Support Automotive Industry Development
The proposed Automotive Development Levy on vehicles exceeding 1,000cc is projected to generate more than Rs232 billion over five years. The funds would support export incentives, industrial development and industry competitiveness.
The policy also proposes technology upgrades for auto-parts manufacturers, the establishment of the Pakistan Automotive Testing Institute, support for research and certification, and biannual third-party audits.
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The levy legislation is targeted for completion by December 2026. The policy’s implementation will depend on cabinet approval and the execution of its proposed measures.
