Auto experts criticise draft policy for weak localisation measures

Auto experts have criticized the draft auto policy for 2026-2031, stating that it lacks sufficient localization measures. Auto analyst Zain Shariq argues that the policy is anti-manufacturing, and proposes renaming it as the auto assembling and import policy. He warns that including Hybrid Electric Vehicles (HEV) in the 18% sales tax regime will penalize them despite their higher localisation, and reduce emissions.

Zain also highlights the lack of initiatives to reduce the structural costs of 34% associated with exporting, and criticizes the subsidizing of EV sales tax losses with Federal Excise Duty (FED) on internal combustion engine (ICE) vehicles. Another expert, Shafiq Ahmed Shaikh, praises the previous auto policy 2026-2031, emphasizing the increased volumes, new technologies, job opportunities, and reduced petroleum import bills.

He also predicts that the new policy will match national tariff board rates and boost the local industry. Shaikh believes that the policy will benefit consumers with cheaper and better features, as well as increase exports to Central Asian and African markets. He advocates for reducing Pakistan's petrol import bill, transforming vendors into export hubs for EV components, and focusing on high-demand EV components to attract global and Chinese EV giants.

Shaikh also recommends a flat 15% duty and a ban on imported used, accidented, and structurally compromised vehicles, along with mandatory digital cross-referencing of vehicle identification numbers and enforcing international crash-test benchmarks.