Pakistan unveils new auto policy, targets $6bn in exports
Pakistan has announced a new auto policy aimed at gradually reducing vehicle prices, promoting electric vehicles (EVs) and increasing automobile exports to $6 billion, Prime Minister’s Adviser on Industries Haroon Akhtar Khan said on Saturday.
The policy took effect on Saturday, he said, adding that the government had developed the framework after extensive consultations.
Addressing a news conference in Islamabad alongside Information Minister Attaullah Tarar, Haroon Akhtar said the policy would gradually reduce vehicle prices for middle- and upper-income consumers.
He said Prime Minister Shehbaz Sharif wanted to make smaller cars more affordable and opposed additional taxes on them.
The adviser said the government prioritised industrial growth but also needed to collect taxes from the auto sector as Pakistan remained under an International Monetary Fund (IMF) programme.
Traditional vehicles would continue to face taxation, while electric vehicles would receive incentives, he added.
EV financing limit raised to Rs10 million
Haroon Akhtar said the government was focusing on promoting electric vehicles, raising the financing limit for EVs from Rs2 million to Rs10 million.
He said electric vehicles had also been exempted from several taxes, while discussions with the IMF continued over a proposed 1% tax on EV.
The government has set a five-year target to shift 30% of vehicles to electric power, a goal the adviser expected to achieve ahead of schedule.
He said regional tensions had increased the importance of electric vehicles and contributed to a rise in their prices.
Vehicle exports targeted at $6 billion
The adviser said Pakistan’s current vehicle exports stood at around $200 million, which the new policy aimed to increase to $6 billion.
The government would extend all possible support to companies exporting vehicles, he said.
However, manufacturers that failed to export vehicles would face penalties. Companies that fell short of their prescribed export targets would also be fined.
He stressed the need to increase local manufacturing of auto parts, saying the new policy would help reduce production costs. Pakistan currently has 16 car manufacturers, he added.
45 new safety standards introduced
The new policy introduces 45 additional standards and safety features to improve vehicle quality and bring locally manufactured cars closer to international standards.
Haroon Akhtar said manufacturers would also be prohibited from collecting advance payments exceeding 20% of a vehicle’s price.
He reiterated that cars below 1,000cc would not face any additional taxes.
Govt aims to cut import bill
Information Minister Attaullah Tarar said the government had developed a comprehensive auto policy to reduce the country’s growing vehicle import bill and provide relief to consumers.
He said protection-based policies had remained in place for decades, but the local industry had failed to add sufficient value to its products.
The government wanted to ensure that ordinary Pakistanis had access to affordable, quality vehicles, he added.
Tarar said the policy would not impose additional taxes on 800cc and 1,000cc vehicles, while electric vehicles would receive significant incentives.
He said Pakistan’s oil import bill continued to rise, adding that reducing it would free up resources for sectors such as health and education.
The increased use of electric vehicles would also help reduce environmental pollution, he said.
Tarar highlighted the role of electric motorcycles in providing affordable transport, particularly for women, and described the new auto policy as an important initiative by the prime minister.