Pakistan Targets 40% Local Production of Car Parts

The Pakistani government has unveiled plans to mandate local production levels for automakers, with the goal of increasing original equipment manufacturer (OEM) involvement in local content from 10% to 40% within the next five years. Prime Minister's Adviser on Industries and Production, Haroon Akhtar Khan, highlighted the policy's emphasis on boosting exports, enhancing consumer satisfaction, ensuring vehicle quality and safety.

He clarified that the draft currently circulating is not final and includes his interpretations. The ultimate policy, however, aims to balance the interests of consumers, manufacturers, and exporters. Khan emphasized that the localization targets would bolster local automotive part producers and generate employment opportunities through heightened domestic manufacturing.

OEMs producing auto parts would be incorporated into the export policy, allowing them to benefit from Drawback of Local Taxes and Levies (DLTL) incentives. Compliance with 69 regulations under the WP-29 Convention would remain mandatory to fortify vehicle safety standards. Third-party inspections, along with certification from an accredited body in the exporting country, would validate vehicle quality, with PSQCA registering third-party inspection companies based on set standards.

The stipulation for pre-inspection certificates for imported vehicles would persist. The advisory concluded by noting that stakeholders had reached consensus on vehicle verification through the Pakistan Standards and Quality Control Authority (PSQCA).