Prime Minister Shehbaz Sharif has convened a meeting to review Pakistan’s long-delayed automotive policy, with approval possible today if he is satisfied with the proposed framework, sources told ProPakistani
The proposed Automotive and Auto Parts Manufacturing Policy 2026–31 is intended to set the direction for Pakistan’s automobile industry over the next five years. The previous policy expired on June 30, 2026, leaving manufacturers and consumers awaiting clarity on the government’s future plans for the sector.
The prolonged delay has created uncertainty for automakers, prompting manufacturers to postpone decisions concerning production and vehicle prices.
New Auto Policy Proposes Major Industry Reforms
Shehbaz had tasked an inter-ministerial committee, headed by the law minister, with reviewing and finalizing the proposed policy. The committee recommended amendments to the draft, including a broad restructuring of Pakistan’s automotive sector.
The proposed framework seeks to increase the use of locally manufactured auto parts in global supply chains and strengthen the international competitiveness of domestic manufacturers. It also aims to encourage investment, increase local value addition and support the adoption of electric vehicles.
Another key proposal involves gradually reducing automobile tariffs to improve the industry’s competitiveness and potentially make vehicles more affordable for consumers.
Export Targets and Local Manufacturing in Focus
Sources told ProPakistani that the committee has recommended seven broad principles to transform the automotive industry. The proposed framework also includes export targets designed to expand Pakistan’s presence in international markets.
Greater integration into global value chains is expected to create opportunities for local auto-parts manufacturers while encouraging improvements in production capabilities and technology.
The policy is also intended to provide businesses with a clearer long-term framework for investment and manufacturing decisions. Its proposed measures could influence localization, vehicle pricing, electric vehicle adoption and the development of Pakistan’s automotive supply chain.
A decision on the policy could bring an end to months of uncertainty for the industry. However, the final provisions and implementation timeline will depend on the government’s decision on the proposed framework.
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