Pakistan has approved a new five-year automotive policy aimed at strengthening local manufacturing, boosting exports, and making the automotive industry more competitive.
The government has set an ambitious target of achieving $6 billion in vehicle exports and $1.2 billion in auto parts exports by 2030-31.
The policy is a positive step towards expanding Pakistan’s industrial capacity, creating employment opportunities, attracting investment, and establishing the country as a stronger player in the global automotive market.
One of the key highlights is the decision to maintain a 1% sales tax on battery electric vehicles from 2026 to 2031, rejecting the IMF’s proposal to increase it to 18%.
The policy also raises vehicle financing limits from Rs. 3 million to Rs. 10 million and extends repayment periods to five years, potentially making vehicle ownership more accessible.
Additionally, lower import duties, incentives for manufacturers achieving export targets, and stricter vehicle safety standards are expected to encourage innovation, improve quality, and support the transition towards cleaner transportation.
Overall, the policy reflects an important effort to promote local production, strengthen the auto parts industry, and build a more sustainable and export-oriented automotive sector in Pakistan.
