Pakistan Ministry of Industries and Production has reviewed the draft of the Auto Policy 2026–31, which is expected to be unveiled on July 1, 2026. The policy is currently under discussion and has not yet been officially finalized. Its main direction focuses on strengthening local manufacturing and improving affordability in the automotive sector.
High Level Stakeholder Consultation Held
A key review meeting was chaired by Special Assistant to the Prime Minister Haroon Akhtar Khan, with participation from senior officials including Secretary Saif Anjum, EDB CEO Hammad Mansoor, and representatives of the auto parts manufacturing industry. The meeting focused on aligning the policy with industry input and long-term sector goals.
Strong Emphasis on Localisation
A central pillar of the draft policy is localisation. The government is working on identifying auto components that can be manufactured within Pakistan to reduce reliance on imports. The goal is to gradually build a stronger domestic supply chain for the automotive industry.
Five Year Support for Local Industry
Officials indicated that the policy may include protective measures for local auto parts manufacturers for up to five years. This support is aimed at helping domestic vendors scale up production capacity and become more competitive in the long run.
Affordability and Tax Structure Reforms
The policy is also reviewing tax and duty structures to make vehicles more affordable, especially for middle-income consumers. The objective is to reduce overall vehicle costs while maintaining a balance between revenue generation and industry protection.
Push for Electric Vehicle Adoption
Another key focus area is the promotion of electric vehicles (EVs). The government is encouraging manufacturers to adopt EV technology, while incentives for local EV parts production are also under consideration. Reports suggest that small electric vehicles priced below Rs 1 million may be introduced in the near future, subject to policy implementation.
Industry Feedback and Future Direction
During the consultation, auto parts industry stakeholders raised concerns about import practices, CKD assembly trends, and declining performance in certain segments despite the increase in assemblers. They emphasized the need to prioritize small and medium manufacturers and shift focus from assembly-based operations to genuine local manufacturing.
