New 5-Year Auto Policy Nears Final Approval

Pakistan's new auto policy is nearing completion, with the administration planning changes to vehicle imports, localization, tariffs, electric vehicles and safety standards.

Key points

• Prime Minister's Adviser on Industries and Production Haroon Akhtar Khan briefed the Senate Standing Committee on Industries and Production on Wednesday regarding the proposed policy.
• Haroon Akhtar remarked imported vehicles would need quality, environmental and fitness certificates from the Pakistan Standards and Quality Control Authority (PSQCA).
• Haroon Akhtar remarked the administration has completed work on the policy through a committee headed by the Law Minister.
• Senator Saleem Mandviwalla triggered concern regarding the impact of changes in vehicle imports on employment in the domestic auto industry.
• The Senate committee additionally discussed employed vehicle imports and changes to the personal baggage and gift schemes.

Prime Minister's Adviser on Industries and Production Haroon Akhtar Khan briefed the Senate Standing Committee on Industries and Production on Wednesday regarding the proposed policy. Electric Car Buyers to Obtain 5-Year Rs. 1 Crore Loans.

He remarked the administration wants to reduce vehicle costs for consumers while protecting local manufacturing. Nevertheless, he stated excessive tariff cuts could hurt domestic production and growth imports of completely built-up (CBU) vehicles.

Meanwhile, the adviser remarked the administration wants to discourage CBU imports and strengthen local manufacturing. The policy additionally includes measures to rise localization and promote electric vehicles.

Haroon Akhtar remarked the administration has completed work on the policy through a committee headed by the Law Minister. After which the Law Minister will brief Prime Minister Shehbaz Sharif, the draft will be shared with the International Monetary Fund (IMF).

Notably, the policy is projected to be presented to the federal cabinet for approval and then shared with relevant parliamentary standing committees.

Meanwhile, the administration has additionally proposed duty drawback incentives for exports of locally manufactured vehicles. Auto-parts industry representatives remarked high taxes remain a major hurdle to increasing vehicle exports.

For context, the Senate committee additionally discussed employed vehicle imports and changes to the personal baggage and gift schemes.

While the gift scheme would continue, haroon Akhtar remarked the personal baggage scheme had been abolished as of misuse.

Under the proposed arrangement, a vehicle imported through the gift scheme would have to remain registered in the recipient's name for one year and could not be transferred during that period.

Authorities stated one vehicle could be gifted once every three years and no extra tax had been imposed on vehicles imported under the gift scheme.

Representatives of the Pakistan Association of Automotive Manufacturers (PAMA) cautioned that large-scale imports of older employed vehicles could hurt local manufacturers and create challenges for the domestic auto industry. Haroon Akhtar clarified that commercial vehicle imports had not been banned. The administration is additionally preparing new vehicle safety and environmental requirements.

He remarked 62 further clauses had been continued to the relevant legislation and that environmental and quality standards would not be compromised.

Meanwhile, the administration is additionally working on safety standards for imported vehicles through PSQCA. Smoke-Emitting Cars Banned in Lahore.

Senator Saleem Mandviwalla triggered concern regarding the impact of changes in vehicle imports on employment in the domestic auto industry. He remarked around 2.2 million jobs associated with the sector could be affected.

For context, the committee reviewed the proposed policy with a focus on vehicle affordability, imports, exports, localization, safety and the protection of domestic manufacturing. Stay Connected with ProPakistani.

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Taken together, the developments around new 5-Year Auto Policy Nears Final Approval point to a situation that is still moving, and the coming days should bring more clarity.